This article actually explains certain aspects of Crypto way better than actual articles that try to explain Crypto.
E.g., I've been wondering why a certain Bitcoin podcaster, who is very popular, has never mined a Bitcoin. He/she talks all day about "stacking Sats", but he/she only buys them. Reading this article made me realize that he/she might see him/herself as a member of the ruling class.
> I've been wondering why a certain Bitcoin podcaster, who is very popular, has never mined a Bitcoin
The people actually mining Bitcoin don't have time for podcasts.
Podcasts, Youtube, media in general are mostly dominated by people who don't actually do other work, because creating content for those platforms is extremely time-consuming.
Bitcoin mining isn't something you can do on your own anymore. Unless you're accidentally located at a place with the cheapest electricity you'll have no chance.
Not to mention the ASICs, by the time end-users can acquire them they're usually outdated.
It's actually the opposite: even that podcaster is probably not wealthy enough to successfully mine a bitcoin. Bitcoin mining requires a big business and not even one that is easy to start wherever you happen to be; you have to have access to cheap electricity.
> working class — a group that does the work the community needs to operate it.
It would be more correct to call miners a Merchant Class. They exploit capital to make profit. Like merchants of old, they take risks that regulations (real-world and the "ruling class") won't impede profit.
Hardware gets outdated quickly as mining difficulty rises, so a timely exit is not difficult - wait until cards die, or offload them ebay.
> As a Bitcoiner I find these actions intolerable and unacceptable
Bitcoin has also forked, many times. Bitcoin Gold for example restored the ability to mine with GPUs. The "ruling class" decided that unless you had access to custom hardware, you could not be part of the "working class".
>Hardware gets outdated quickly as mining difficulty rises,
People can and still do mine Ethereum with the cards they did 5 years ago, and the difficulty is irrelevant to whether your hardware is outdated or not.
According to the nicehash calculator (which is fairly accurate) even with the really expensive electricity (0.34euro/kwh) in Germany you'll net 1.31 euro a day with a 1080 (released May 2016).
Is there any network where the inflationary half-life of the currency is something like a week? I've been looking for something like that since I heard that Bitcoin was deflationary.
(I was excited about Eth until I learnt its currency had persistent value...)
Imagine: a network where the only gains you get are from spending your money quickly. The anti-hodl. It would be completely worthless as a store of value or investment vehicle. Its only conceivable use would be as a fast and efficient transaction ledger.
Which is what I wanted out of blockchain to begin with! I'd be happy to support a network like that, even if my income was rapidly vanishing.
If a VanishingCoin will lose half its value in a week, and I buy and sell it in a second, using it as a fast cheap safe transaction, then my cost will be at least equal to (1/2)^(1 sec/1 week) of the transaction. VanishingCoin will be outcompeted by SteadyCoin, which is just as fast, cheap and safe, and doesn't lose its value.
Doesn't that prove too much? For any coin you can imagine a more deflationary version of that coin. Bitcoin has had plenty of such forks. The argument above would indicate that the most deflationary would win, but it doesn't. So it can't be the whole truth.
I think that assumes we're in a state where people are buying coins for their supposed use. But at the moment, demand is mostly speculative.
There's also a very crowded market for coins right now. Most will not take off. Even if coin X has perfect fundamentals, there's a self-fulfilling equilibrium where nobody buys it but instead buys coin Y which is slightly worse.
My argument is that in the long run, a very inflationary coin would not be attractive. Using it for transactions would rely on greater fool theory. You buy it so you can sell it immediately. But that means you must sell it to either (a) someone who holds it and loses half his money, or (b) someone who buys it and sells it immediately, again to either (a) or (b)....
The intent is to be outcompeted as an investment vehicle. The goal is approaching zero investment.
I'm thinking that inflation would be priced in as platform fees for exchanges. Thinking of transactions in terms of throughput, the question is "how long do I have to store EUR in INF to be able to match an EUR sell with a buy." The transaction fee would be (at least) the inflation over that range.
The notion that blockchains should produce value by competing for investment is exactly the wrong idea that I'm trying to avoid.
An inflation half-life of a week is probably excessive. It really only has to be bigger than the IRL currencies it interfaces with. (Which in turn only have to be bigger than the value growth in their market.) But proposing a high inflation like that puts the focus of efficiency and monetary gain on improving transaction performance, which is imo where it should be.
Also having a high inflation lets you limit the size of the ledger - eventually, old transactions simply become irrelevant by being too comparatively small to matter. You could even reward people for erasing their historic transactions - ie. allow them to roll several historic transactions into one, as a way to reduce the inflation tax. (Or phrased differently, tax ledger entries.)
I understand that you don't want people to buy it for investment. My point is that even buying a coin for transactions relies on having someone to sell it to later. Take an equilibrium in which everybody uses InflationCoin for transactions, paying the cost implicit in the inflation rate. Why would somebody not offer FixedCoin as an alternative, identical except for having lower inflation and hence a smaller cost? Why would FixedCoin usage not then spread to replace VanishingCoin?
Well, the idea is people would use LessInflatyCoin as long as the inflation was still high enough to make it unviable as an investment vehicle. But once inflation was high enough to make the coin usable as an investment vehicle, it would become a worse unit of transaction because you'd expose yourself to Bitcoin's attendant bubble risk. For instance, if you were to sell something for FixedCoin 1mil, you might have a hard time predicting how much your FC 1mil were worth tomorrow, or in a week, and your incentive would be to keep the money and gamble that it goes up, whereas IC's value development is highly predictable (ie. just slightly negative) because it's only driven by current use. I'd expect this to make IC more appealing to "boring" corporations.
I work for fiat and this happens already ! You dont need crypto to have a working economy based on consumption and trade.
In fact, crypto is perceived it seems to be an absolute value stashing system where you collect your reward and store it for free until you want others to produce effort for you.
But I refuse to produce effort for a guy who spent his energy 50 years ago and just throw at me a few gold coins to do his bidding. He wants me to work, he needs to pretend to be doing something too.
Well, you are basically thinking of freicoin which is the oldest bitcoin fork.
It died because you cannot start with the currency. It has to be a local community project. There are lots of complementary currencies on this planet but only regional currencies end up successful.
Cryptocurrencies are problematic because they don't foster a face to face community. The idea is that you are taking advantage of a sucker 1000miles away from you.
The most anti-hold coin would be Grin with its 1 Grin per second forever emission. About 2.5 years old, it has only reached 2.5% of its soft total supply [1].
This week with EIP-1559, ETH has been deflationary several times now... more fees have been burnt than emitted within a block. It is quite fascinating to watch.
Both basic income projects. Proof of humanity ubi tokens are more easily tradeable and meant to provide Sybil resistance to eth projects, but circles has a nice self contained design which is probably more interesting as a form of basic income/ community currency.
Seems like one of the core arguments of this is that the the core devs have pushed the difficulty bomb multiple times because they've missed their original timelines for switching to PoS without any repercussions.
It seems to me that this is actually the correct thing to do. I'd rather the core devs take their time and iron out the issues instead of being incentivized to play fast and loose with a system that manages billions.
The Community calls didn't reach agreement with miners, and the fact that they kept protesting it is why the Ethereum Foundation decided to move the ETH 2 timeline forward.
>As a very large miner, I was always for 1559 because I understand the underlying mechanics.
I don't know what mechanics you think others didn't understand. Your profitability has dropped and the move is basically moving miners' profit to the largest holders (e.g. everyone who pushed for the change). It's not like the fees have dropped since EIP-1559 if that's something you thought the change will bring for some reason.
As for profitability changes, that's almost impossible to measure right now. There is too many variables. One is that there isn't any wallet support for 1559 yet (MM came out today and is apparently, um, lacking). People are still over paying for transactions. Difficulty + price changes + pool luck + changes in hardware stability also make things nearly impossible to track accurately. I have a margin of error, but it doesn't look too bad right now actually.
Exactly. 50% isn't enough to reach consensus. I also know pools that voted against it, which kind of regret that now that they understand things better. A big issue is that miners and some of the pools were still raw over progpow.
Point #1 is a big one. A huge number of people thought that fees would go down.
They brought the miners onto the weekly cat herders (the name for core dev weekly sync) meeting they hold. I watched the stream. They listened to the feedback, some other miners that were for it including Stakefish were present. The arguments weren't strong at all from the miners that were opposed and in the end, they dropped it.
It isn't quite that simple. There is a whole bunch of game effects happening here that add a lot of complexity to a statement like that.
One key one is price, another is that most miners barely understand how the network works and therefore couldn't exert any force even if they wanted to.
Pools concentrate the force, but miners can move to whatever pool they like the best (usually the most profitable... which is where the main store of wealth is)...
It's very outdated now, that's not the point. The point is that every circle on the road map is a very complicated project in and of itself that needs tons of research, development and testing to be implemented properly. Just the code itself is thousands of commits.
Absolutely, not to mention Eth just rolled out a major update last week. This rambling, bizarre article boils down to a few very basic, extremely played out arguments.
Argument 1: Proof of stake concentrates wealth more than proof of work.
You can make that argument, but POS advocates have for a long time argued that proof of work mining has more economies of scale than proof of stake and therefore the opposite is actually true. Equating proof of work miners to the working class & stakers or developers as wealthy elites or rulers is so massively cringe it's tough to even read.
Argument 2: Ethereum is in active development, is planning to switch to proof of stake, has things like difficulty bombs, and therefore is somehow dishonest.
Decentralized blockchain communities come to consensus around different values and philosophies. Eth has for a long time been a community which values consistent iteration and improvement around fundamental aspects of the protocol. The transition to proof of stake has been known for years and years. There's nothing dishonest about any of this. If anything the community has been asking for faster iteration to solve high transaction fees and improve usability. Bitcoin's development stagnation works fine for bitcoin. Ethereum is clearly making the right move in continuing to improve the base protocol. Which as you mention is a huge, extremely complicated undertaking.
The article goes on to some cognitive dissonance about how Ethereum doesn't deliver on promises despite the fact that it just delivered a major protocol update last week... might as well throw in the dao hack and icos and whatever else in there and see if anything sticks. I guess with nothing to develop or build, bitcoin maxi's have a lot of time to ramble incoherently about Ethereum. And they probably always will.
I'll preface that I somewhat dislike how Ethereum has established their PoS consensus. The lack of first class support for delegated staking poses a problem IMHO as it requires handing control of your coins over to a third party considering this is the only option for people without 32ETH(102k USD) that they can tie up. I also have opinions on locking periods but until we see some extended battle tests proving where the sweet spot is (I'm for no-lock staking personally), I won't consider this a major issue. These aren't criticism of PoS itself but rather critiques of this particular implementation.
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Now that that is out of the way, I don't necessarily believe that Argument 1 is inherently true (I know you aren't necessarily supporting it but I figured I'd throw my 2p in).
Ultimately Proof of Stake is just moving from a system with an external resource to one with an internal resource. This theoretically allows you to largely divorce the system from the harsh realities of the outside world (whose rules those external resources are bound to). By isolating the system you can better structure the rules of the game (from a game theory perspective) without being influenced or bound to rules from the outside system. Of course this isolation is only as strong as the network (larger market cap makes attacks harder) but generally once the network reaches scale it is largely independent of the outside world.
How a system influences the distribution of wealth ultimately depends on those rules in the system and by PoS largely granting the system the ability to decide those rules for itself, you can theoretically design a system with an expected steady state at or around the middle class at which the system can help lift those with less wealth up and weigh those with more wealth down. Balance it incorrectly and you run into issues one way (concentration of wealth) or another (lack of staking support opening up risks for attack) but theoretically it can be done right.
One of the key features of that balance is that wealth is worth the same whether it is held by many people or one person. It should be just as viable for a thousand people to lend 100 dollars as it is for a firm or wealthy individual to lend 100k with both groups exposed to the same amount of risk all other things the same.
Various mechanisms of the network including staking (including delegation), access to a democratically controlled treasury, first class support for governance primitives, and other such features are essential for making such a system work. Proof of Stake on its own may generally provide an accrual of wealth but in combination with the other forces on the network it should be perfectly viable to create a network that promotes distribution towards a reasonable steady state (with deviations due to merit of the individuals or just outright luck and not maintaining such deviations long term).
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/rant
I'm generally pretty cynical but no matter how hard I dig into it, I can't find a reason why PoS shouldn't be one of the last pieces of the puzzle to produce such a system and if it's even just a chance I think it's exceptionally valuable that we pursue it. Or maybe I'm just a crazy Crypto-LibSoc. ¯\_(ツ)_/¯
>The lack of first class support for delegated staking poses a problem IMHO as it requires handing control of your coins over to a third party considering this is the only option for people without 32ETH(102k USD) that they can tie up.
You should take a look at RocketPool. It is a project that will introduce decentralized staking pools allowing people with >0.01 ETH to trustlessly stake (except for smart contract risk, of course).
But hasn't dPOS shown that people don't care that much about governance and will just hand their coins to someone, anyone who promises to reward them? The current crop of dPOS coins leaves a very stale taste in my mouth as they all seem to be run by an oligarchy of validators who conspire to let no one else in.
Staking services like RocketPool just bring the idea to ETH but if you were early, you can stake on your own.
Support for delegated staking is already here, it's just not widely used yet. The trick is that you specify a contract address as your validator's exit address, and that contract keeps track of who has partial "ownership" of the validator and thus is allowed to withdraw their fraction of the stake after the validator exits.
Lido for example, a staking provider, already keeps their new deposits in custody of a contract like this.
While reading the article all I could think about was that it sounded like it was written by a bitcoin maximalist, so many things were framed in bad faith that it makes it difficult to take for granted that it is an honest attempt at discussing the issues surrounding Ethereum, especially when it is basically rehashing things that have been discussed many times before. It makes me wonder how this got to the top of HN, maybe an enemy of an enemy is a cryptocurrency skeptic's friend or something.
Thank you for taking the time to type this. The topic of PoW vs PoS is very misunderstood and I see a lot of dishonesty in online forums.
I am very optimistic about Ethereum. It is not perfect but it is massively and consistently improving. The past few years, all crypto innovation was incubated within the Ethereum community.
Correct, the bomb is meant to be moved. It is more like a carrot/stick. It is the gadget that allows the devs to turn off the lights on the miners when they are ready to turn them off. Having a forced migration knob is a good thing.
Agreed. The article feels a bit like it's salty about a very complex software project behaving like a very complex software project.
My understanding of the changing of the rules "as you go" is that it's based on the reality being faced by the system. Bitcoin's proof-of-work is simultaneously one of it's strengths and one of its weaknesses, and Ethereum has chosen to move from PoW to PoS because of the belief that it's the right path to follow in attempting to solve the problems the system is facing in reality.
I don't think the "working class" vs. "ruling class" analogy is particularly fitting. However, to continue the analogy, the profitability of Ethereum mining (from what I've heard) would have allowed pretty much all of the early "working class" to have climbed the social ladder to "ruling class" if they held onto some percentage of their earnings (you know, like "savings" or "investments" in this real-world analogy). If the "working class" believed in the longevity of the project they've chosen to work for, wouldn't they see the investment opportunity? Otherwise they're just there for the immediate profit, and there's no long-term contract or agreement that's been broken. The system is evolving, like what happens in the real world.
> As a Bitcoiner...
> We wouldn’t dare...
> We would never...
> doesn’t have a ruling class to take advantage of other classes
Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi Vision. Take off the rose-coloured glasses, "your community" isn't sunshine and roses either.
Personally, I think PoW may be what brings Bitcoin down in the long-term.
>Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi Vision. Take off the rose-coloured glasses, "your community" isn't sunshine and roses either.
I think this is unfair. These are splinter communities. It's like critiquing Ethereum's community by pointing at Ethereum Classic and Binance Smart Chain.
>Personally, I think PoW may be what brings Bitcoin down in the long-term.
I pretty much agree with this part. I think it'll probably cause very serious issues for it over the next decade. I predict they'll actually eventually move off of PoW or drastically alter the PoW algorithm, but only after many years of infighting and stubborn refusal to consider the possibility.
Don't get me wrong; I think the article is very unfair and awful in many ways. I just thought that particular counter-argument wasn't valid. I think their point about ETC can't really be compared to the Bitcoin community splinters, since the point is about the DAO hack rollback. The block size debates were very controversial and heated, but not to the degree of the DAO hack incident.
Ethereum is the cryptocurrency I personally like the most, but I do find supporters tend to downplay just how controversial that incident was.
> This time the working class has their pay reduced from 4 Eth to 3 Eth per block, a 25% pay cut. Miners now earn 40% less per block than at the time of the community’s constitution, which promised that code was law, and which the ruling class later said they would break only once, for what was an especially good reason. But the code is law promise has now been broken so many times people expect it to occur at regular intervals and even worry that “progress” is slowing down if there aren’t frequent enough hard forks (to break that promise yet again).
Miners for Ethereum are incredibly profitable and benefit enormously from side-channel MEV (miner extractable value) payouts that tip them for transaction ordering. In doing so, they extract value from users making trades. In addition, a reduced issuance in crypto tends to lead to the underlying asset appreciating in value, as noted by the Bitcoin stock-to-flow model in the wake of each halvening.
The "code is law" is not some universal absolute. Blockchains have always been forkable. But a chain can't have a contentious fork without a cost and it becomes costlier and riskier to do later in a chain's life.
My understanding of MEV was "Maximum Extractable Value", and to clarify: MEV is the process by which a miner takes advantage of their ability to view pending transactions so they can "front-run" (add their own transactions ahead of) the transactions of others, bumping up the costs for the transactions that come after theirs, thus "extracting maximum value" from their privileged position.
Using the original article author's analogy, the "working class" are adding their own percentage to the retail price and taking those profits home.
MEV began as Miner Extractable Value, but a lot of people are adopting Maximum so that they can keep the same acronym for proof of stake.
They typically don't have the on-chain analysis or skill to reorder the transactions in the highest extractable way, so people bid for these opportunities through side channels they signal the miner to do (off-chain) based on the mempool (backlog) of transactions. Miners profit from this activity and in some cases these profits exceed the 2ETH per block issuance. The class analogy is strained and doesn't fit at all. These are only possible because Ethereum has a rich application layer (and if anyone is 'working class' it's the users, devs and dapps on the chain). But these profits more than made up for any offset in EIP1559 losses.
Also, Ethereum Classic has been 51% attacked and then reversed transactions a few times. So not sure if author is recommending ppl avoid altcoins entirely?
The way that's written like Ethereum owes the miners a job strange. Ethereum isn't a work program for miners to manage mining hardware. Ethereum functions on proof-of-work and needs some people to sell their compute time and electricity. Miners aren't doing a generous service that would be useful outside of Ethereum that should be encouraged any further than Ethereum's specific needs.
With PoS, the pay for miners is planned to be cut from 3 eth all the way down to 0, and that's great that Ethereum will become more efficient in that it no longer needs so much compute time spent on it. Ethereum will switch to needing stakers to provide a service to it that they're paid for, but if people designing Ethereum knew a way to not require that while still staying decentralized, then that would also be a great upgrade.
> The way that's written like Ethereum owes the miners a job strange
I think it's fair that if you've purchased specialized mining equipment, you expect the ROI you were promised. Doesn't seem strange.
> Ethereum functions on proof-of-work and needs some people to sell their compute time and electricity
So compensation for work. If not 'workers', you could call them 'investors', or perhaps 'sole traders', or 'merchants', not sure what the best analogy would be. To be fair, I don't necessarily put them in the same class as people making socks in a sweat shop on slave wage. The down-trodden Ethereum miner is not someone I lose sleep about.
Many miners buy purpose built servers for crypto mining.
> Was there not enough warning before the changes?
That's the main plaint of the article, and reiterated multiple times. The article claims that the prices was dropped with 2 of the forks, each time it was promised (including at the very beginning) that changes would never be made. Each fork seemed to be of gain to the people who were part of the ICO, but at an income loss to miners. There were several broken promises of no further forks.
I'm not sure the GPUs could be reused for some other purpose that generates as much value. Perhaps another alt-coin is the best way to redeploy this resources
> I'm pretty sure proof of work was supposed to be dead years ago. The current state is more than promised.
> I think it's fair that if you've purchased specialized mining equipment, you expect the ROI you were promised. Doesn't seem strange.
ROI was never promised. Ethereum has always had a "Minimum Necessary Issuance" policy. Keeping issuance constant would be deviation from the policy, reducing it when possible is in line with the policy. From the docs:
> Ethereum's Monetary Policy is defined by the rewards that are paid out by the protocol at any given time. Ethereum's current yearly network issuance is approximately 4.5% with 2 Ether per block and an additional 1.75 Ether per uncle block (plus fees) being rewarded to miners.
> Ethereum does not have a fixed supply because a fixed supply would also require a fixed security budget for the Ethereum network. Rather than arbitrarily fix Ethereum's security, Ethereum's monetary policy is best described as "minimum issuance to secure the network".
> Ethereum has had a history of reducing issuance to these estimated minimums and the network has never increased issuance. The move to proof-of-stake is also part of Ethereum's effort to reduce issuance to minimum amounts without sacrificing security.
This argument is so old that it's almost endearing to see people arguing about it time and time again. Code isn't law, and it never was. Consensus is. This is true for all blockchain-based cryptos.
Miners are free not to upgrade every time a new protocol version is proposed. Why do they upgrade then? If consensus was established around the older set of rules, that would be it. But instead there's consensus around the newer rules. And that's simply because miners individually decide that the newer rules are better, for whatever reason.
Honestly, that's where the article becomes totally bizarre. ETH is now worth in fiat 3000x more than in 2015, and miner's expenditures are in fiat. So instead of cutting mining rewards by say 95%, it got cut by 25% and that's somehow evil?
Miners don't earn 40% less, they earn 180000% more than back then. Of course not individual miners, but as a "working class".
Another point that's underemphasized in the piece: forkable governance with voluntary participation is very different from the scenarios that go with a "ruling class".
Why have this fake deadline at all then? That sounds like it is playing fast and loose with the system, since it practically requires a nontrivial action to postpone.
The point of the difficulty bomb isn't to put a deadline on the developers, it's to prevent a situation where node operators get complacent and stop updating their nodes.
It forces node operators to come to consensus on whether to fork alongside the developers or to fork in a different direction. It removes the option of doing nothing and letting the Ethereum chain stagnate.
"Something here seems awfully similar to the system that crypto-currency was meant to fix. It was meant to eliminate rulers. It was meant to make everyone accountable for their actions. It was meant to reward the intelligent, the hard working and the capable, and not reward the incompetent, or the makers-yet-breakers of promises. However, this repeat of the broken old system seems to be playing out again."
One response is that the promise was not well thought through. The idea was to replace "rulers" (human beings who make decisions to take care of a system) and "law" (written rules interpreted by humans) with code. But (a) code is written by humans who make mistakes; (b) the world changes, and systems need to update to respond to that; (c) somebody has to be responsible for dealing with a and b. As a result, currencies need central organizers to look after them. And those central organizers need to be motivated, i.e., paid. Old-fashioned currencies have sovereigns to back them, and the sovereigns are paid by the monopoly of taxation and/or the ability to issue money. Inefficient, but it works.
From this perspective, bitcoin et al. look like technical solutions to social problems. In particular, bitcoin is designed to have nobody taking care of public goods problems on its behalf. That's a flaw![1]
Also, humans or not, in any given system, there will be people in position to analyze and take advantage of subtle / indirect / emergent effect of that system. Be it better brains, more funding to try strategies, it will happen.
it's funny that this appeared today. i've recently been musing about whether or not a technical and political migration of the bitcoin ecosystem from proof of work to a consensus model that simulates the proof of work economy in a clean way, complete with a socio-economic solution that does not leave miners and their associated/secondary economy out in the cold, could be an idealized model for migrating the global economy off of fossil fuels.
There are a number of articles claiming various percentages of Bitcoin mining from renewables, but this is probably the most balanced quote:
"Commonly cited estimates range from 39% to 73% renewable energy. Jesse Morris, CEO of non-profit Energy Web says most estimates find 20% to 50% of bitcoin is powered by renewable energy, but all available numbers are based on self-reported data, which is unverifiable. 30 June 2021"
My inner optimist is satisfied that the renewable percentage is constantly growing.
Does anyone know of any sources that attempt to look at the marginal energy source rather than the average energy source?
For example, a region might have 50% of its power from hydro and 50% from gas, but 0% of new power plants are hydro and 100% are gas. In such a world, adding a new electricity consumer to the grid causes 100% gas emissions, even though "50% of power is clean hydro." The proper attribution really ought to be the causal attribution, which typically means looking at the marginal source of power rather than the average.
I know this is a complicated topic. Entire PhD theses have been written on modeling the emissions impact of EVs, and there's a healthy debate of how to best calculate the 'causal' impact.
as long as there are any dirty megawatts, any clean bitcoin mining energy could be replacing it, assuming it is physically close enough to existing electric power grids.
all bitcoin mines are is a proof of investment for the purposes of divvying up entries in a decentralized periodic lottery where the probability of winning is proportional to ones investment in equipment and energy.
is it really truly impossible to efficiently simulate this (specifically the economics, so that existing players don't revolt) while maintaining decentralization in the consensus algorithm?
it seems like there could be a technical solution, but the harder problem is building political consensus in a decentralized world... sort of like getting the global economy off of fossil fuels...
(b) is why Bitcoin core development has stagnated[*]. And that's fine if people just want it to be like gold, however Ethereum doesn't aspire to not evolve.
(c) I actually disagree with. Decentralized governance is a very interesting subject, and some cryptos like Tezos are governed quite decentralized in many ways.
Right now I'm really confident in how Ethereum is governed, with the "old-fashioned" open-source development model, where everyone can participate, but core devs have the final say. However, decentralized governance may be something they implement in the future.
> some cryptos like Tezos are governed quite decentralized in many ways.
Whenever crypto enthusiasts tell me about DeFi governance, I get excited about the possibilities.
Then, I actually take a look at some of the group decisions, and literally all of them are crypto/coin-related, and don’t deal with any /real/ or human problems…
Yes, so you’re proving my point? Sure, it’s about lobbying, but in defense of crypto (Previously known as: DeFi Political Defense Fund), to keep their crypto ball rolling.
yes, indeed. I just thought this case is slightly different, they chose to go out and do politics (true, over crypto nonetheless). But I feel that normally, all the proposals are about the protocol itself, changes rates, etc and this case it's about interacting with other humans.
I'd recommend looking at Project Catalyst out of the Cardano ecosystem.
Of course the proposals are still heavily focused on internal/ecosystem development but there's an increasing focus on building platforms for people in developing regions as well. There has generally been a heavy focus on improving connectivity and access to affordable financial services within the African continent however recently there's been slowly growing focus on other regions with large unbanked or under-banked populations.
With the amount of money that is allotted via the treasury for the Cardano ecosystem, Catalyst (and eventually proper on-chain governance when it evolves into that) has funding to comfortably run it's 6 week cadence funding rounds indefinitely at a rate of 15 million USD per round once it finished scaling up. As the network grows the scale will likely increase but regardless I think with the focuses the community has (particularly thanks to West Africa Decentralised Alliance) we'll see increasing focus on improving infrastructure and access in developing regions.
And while you could argue that many of the solutions proposed have some net positive effect flowing back to the ecosystem, generally the focus has been on connecting people rather than driving traffic to the network.
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Sorry if that got a little long winded. It's a cool project+community and we've been working really hard to avoid the toxic coin maximalist & self-centred behaviour that's become so incredibly common in the space.
Come on. I wish ADA well, but Charles is one self-centered person and the community has erected a cult around him and is super toxic against other projects. After BTC maxis, ADA has the most religious maximalists I would say.
As someone who started learning about Cardano recently and has listened to some of Charles' broadcasts on YouTube, I'm not really sure what you're referring to. To me he seems happy to celebrate success in other crypto platforms, has some strong opinions and a libertarian bent, but of course is building Cardano according to his own vision.
BTC maximalists are quasi-religious in my experience but Cardano just seems to recognize the inevitable ascension of the blockchain and is building for that future, very similar to Ethereum.
Maybe he's full of it; I've encountered other comments criticizing him but none that were deifying.
I agree that Charles is self-centred and that there is a cult of personality around him to a certain degree but it really depends on which part of the community you are in as to whether it's "this is an influential person in the space so let's listen" or "our god king is speaking".
The Project Catalyst community, the official IOG developer discord, and even the Cardano subreddits (r/Cardano, r/Cardano_ELI5, r/CardanoDevelopers, etc) to a less extent aren't caught up in this cult mentality so much. When Charles says something stupid, innapropriate, or unbecoming, people are not afraid to address it in these spaces. On r/CryptoCurrency or on twitter it's a different story but Twitter is a cesspool (especially for any cryptocurrency) and while we try to call out the zealots on r/CC, it's not particularly easy.
In those dedicated Cardano spaces though, there is a marked effort to avoid the cult mentality and redirect that energy towards focusing on actual projects.
Very few people (in these communities) have the belief that somehow Cardano is going to be the dominant cryptocurrency or is going to "take over the world" so to speak. There is a strong belief that the project will be successful and a strong ecosystem is forming around it but not that it renders other chains irrelevant or that it must grow at any cost including via the minimisation or attacking of other networks. The general consensus is that it will make a strong showing and settle into a reasonably solid position in the greater financial ecosystem where it'll be intertwined with and coexisting with legacy financial systems and the other major cryptocurrency networks.
TLDR: Every topic/space has zealots unfortunately but looking at their core communities I've found Cardano to be generally fairly resistant to this behaviour. It's not a perfect community by any means but out of all the communities I'm involved in, I've seen more people in the Cardano ecosystem go out of their way to walk others away from maximalist behaviour or zealotry than any other community. I've been around for quite a while and I've seen how the different communities have evolved so I like to believe I've gotten a reasonably comprehensive view of the communities but no person can see everything and in the end this is all anecdotal experiences.
> I'd recommend looking at Project Catalyst out of the Cardano ecosystem.
Could you maybe provide some examples of these /real/ problems they want to focus on? No DYOR, since you seem to be actually involved in the project.
Providing banking services for under-banked regions is yet again, for the crypto. Avoiding KYC is not a feature; I would argue that developing countries need robust infrastructure that incorporates societal laws, for positive outcomes.
Fair request. I'll pull the ones off the top of my head.
Catalyst just recently funded a proposal for a decentralised pharmaceuticals project that is initially basing out of Southern(?) African nations (primarily SA atm I believe). Initially I believe it is focused on aggregating the information and technology necessary for some common life saving medications. The end goal is to provide easy access to process knowledge so as to reduce the barriers of entry for local organisations to start (or improve) production of and access to medications. This project is definitely a bit of a long shot and it'll need more funding than what it got so far but provided their regular reporting looks good, odds are they'll be able to come back for additional funding rounds until they can ramp up to a sustainable model. IDK if it'll work but I wish them the best.
Another proposal was funded to attempt rolling out food traceability solutions in I think Western Africa to help farmers get easier access to global markets (rather than being stuck selling to a megacorp that then resells for much higher).
Additionally, the next funding round has a category dedicated to projects that are focused on micro-finance on the African continent (think Kiva loans) which has the potential to significantly improve the lives of farmers and people starting small businesses.
I would go into the other Project Catalyst projects more but Catalyst is still in it's early stages (scaling up is happening but it won't be at 100% until the end of the year) so there aren't a tonne of funded projects overall yet. There were some other projects that didn't get funded but they generally had issues that need to be resolved before they are really even worth discussing. We are still ironing out some of the issues with the whole process so it's been a bit of a bumpy road so far.
Also of note is World Mobile. They are in the same space and are rolling out a decentralised ISP network in Tanzania focused on providing at least basic wifi connectivity to rural villages.
Of course all of these projects are generally aiming to produce some kind of income at the end of the day but that's not inherently a bad thing as it promotes making the projects sustainable (rather than relying on outside funding). Additionally one of the goals with these projects is to try and jump start or otherwise stimulate the economies they are targetting so approaching from a business approach rather than a purely altruistic approach could potentially yield better results.
Also they all generally use cryptocurrency/decentralised tech in some capacity but it's not like the cryptocurrency itself is the focus. The community has a cryptocurrency focus so it's common to see people approach the solutions from that perspective.
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> I would argue that developing countries need robust infrastructure that incorporates societal laws, for positive outcomes.
I agree and generally that's been the consensus in the community as well. The overwhelming theme has been to try and be as non-disruptive (in a negative sense) as possible. Progress is slow if it's to be successful in most cases and the last thing you want to do is to cause upset in the local communities. As an anecdote, at least in the Catalyst community all the projects I've seen that are "boots on the ground" type projects have had a strong focus on doing things by the books and not accidentally stepping on any toes along the way.
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I hope that addresses everything. If you have any questions let me know. I'm a bit strapped on time so I may not be on HN for a day or two but I'll eventually be around and I'll respond when I can.
The primary usage of the network will be to provided a funding and governance mechanism for open source research and drug discovery.
It's mostly just a convenient and transparent way to fund R&D as well as to allow supporters/participants a controlling voice in the operation of the organisation.
Here's a link to their proposal. You may have to create an ideascale account to access it but if that's the case and you don't want to do that, let me know and I can mirror it over in a comment here.
Tezos for example has the problem of missing liquidity. So they voted for protocol level liquidity called liquidity baking. A little bit of inflation is used to incentivise liquidity providing. It's an experiment but it shows the power of governance. See https://liquidity-baking.com/ for current liquidity.
For sure it will always be voted on something that is good for the chain or for the token. When its good publicity for a chain to vote for charity-baking you could solve human problems.
Maybe take a look at Proof of Humanity? proofofhumanity.id. Real world problem (poverty) being tackled by crypto via a DAO. Very early days yet, but fascinating to watch as it evolves.
Some people believe that government issued ID in conjunction with a government that implemented a UBI scheme would indeed improve poverty. Andrew Yang wrote a reasonable book about the idea.
sybil-proofing in blockchain systems opens the possibility for any person or community to take a shot at implementing UBI. Could someone succeed in creating a token that retains some level of value long term and also consistently tops up at some rate in everyone's wallet? Beats me. But sybil-proofing is absolutely blocking issue on that front.
I am serious that it is straightforward to create a token where everyone on earth gets X/day in a sybil proof system.
Making this token retain some sort of value is of course an entirely different problem, and I don't have strong opinions on whether someone might pull it off.
> (b) is why Bitcoin core development has stagnated. And that's fine if people just want it to be like gold, however Ethereum doesn't aspire to not evolve.
How stagnated is Bitcoin development? Yeah it is not progressing super fast, but I think it is still progressing. Taproot has been accepted by miners and will be activated this year. Improvements are being done.
As Bitcoin is the biggest crypto by market gap, I think risk-aversiveness is a good thing. While I was initially a big blocker, now I think that going without a hard fork was probably quite a good idea. Bitcoin still works nicely and I still use it a lot, now I just use LN transactions in addition to onchain txes.
I'm not sure we should treat the base money of the internet the same way we do tech startups - to "move fast and break things". I would like to know that my BTC is stored in a network backed by code that is secure with slow and steady progress.
There's certainly a good middle ground between moving slowly and moving quickly, I think Ethereum has found that middle ground.
Half of this article is complaints about how Ethereum is moving too slowly with the PoS transition. They're certainly not of the "move fast and break things" mindset.
eth feels like wild west of script kiddies writing javascript to manage billions of USD. far from being middle ground, it's quite the opposite of btc's "let's not ruin the foundation even if we'll be called unnecessarily conservative" stance.
in fact, i would even argue that btc's stance is closer to middle ground as they are clearly working towards making it easier to run all sorts of wild experiments in the upper layers while protecting and minimizing what's going on in the base layer.
I agree. Bitcoin is a better store of value, Ethereum is a better tech stack for innovation. They serve different purposes and so should have different development schedules and risk aversion.
At its core, a store of value is just something that other people will desire as much now as they do at some later point in time. In that sense, Bitcoin runs the risk of being left behind if PoW at 7tx/sec becomes seen as the dial-up modem of crypto.
A store of value is a meaningless term. Value can't be stored. Stuff can be stored. And no assurances can be made as to whether stuff will keep its value over time. Anyone who does that is a charlatan.
https://bitcoinops.org/. bitcoin is far from stagnant, there's a ton of research and development going on, it's just not being treated as "move fast and break things" kind of project.
it is really sad state of affairs when you only consider something as not stagnant when it's constantly putting people's money at tremendous risk.
I just find it unbelievable that after a decade of the smartest people moving into the crypto space, the best crypto solution is the first one, created by a single person 13 years ago.
Decentralized governance is interesting like nuclear fusion: it's 30 years away and always will be. Real governance requires somebody to take the time and effort to think about solutions to public goods problems. In other words, governance is a public good. Decentralizing it just results in underprovision.
Except nuclear fusion isn't 30 years away anymore. A ton of progress has been made in plasma physics. There's a good chance we'll see an energy-positive reactor by the end of this decade.
I do not. Direct democracy, as practiced by Athens, would be a better example. Worked OK for Athens for a while. Athens had probably 30,000 citizens. No modern state has tried replacing representative democracy with direct democracy, for reasons nicely explained by Benjamin Constant (https://oll.libertyfund.org/titles/constant-the-liberty-of-a...).
There is nothing wrong with technical solutions to social problems per se. For example, sovereigns tend to spy on their citizenry, and the technical solutions of cryptography and steganography help mitigate that, albeit in a limited way.
The problem with Bitcoin at al is that they propose wrong solutions to ill defined social problems. Absolutely no real macroeconomic insight was put in the initial bitcoin halving block reward. Later adopters invested it with magic ability to forever stop "inflation", ill defined as taxation through monetary expansion. What resulted was a highly speculative asset that even 10 years later shows no signs of macrostability and is prone to losing 50% of its value in a single trading day. The social costs of using such a monetary unit day to day would be orders of magnitude higher than any reasonable inflation.
Another ill defined problem was financial privacy. In most cryptos, there is no way to socially cooperate to reliably
limit financial privacy of bad players. What you get is an excelent system for teleporting a wad of cash across borders - if you can stomach the volatility. And it just so happens there is a substantial "market" that requires this laundry service and would gladly pay 10% or so to transform illicit gains into "crypto investements".
I personally enjoy the absurd concept of decentralization that crypto proponents have while centralizing the governance and law of global monetary policy. If you wanted to create a global government, this is where you would start. It takes financing to enact laws and the board directing the dominant coin are defacto legislators of this new world order.
gold is law (as in, overwhelmingly subject to physics laws) and it has survived for millenia. Whatever social problems caused people to move away from it, after some time they kept going back
> Something here seems awfully similar to the system that crypto-currency was meant to fix. It was meant to eliminate rulers. It was meant to make everyone accountable for their actions. It was meant to reward the intelligent, the hard working and the capable, and not reward the incompetent, or the makers-yet-breakers of promises. However, this repeat of the broken old system seems to be playing out again.
Was it? Most of these goals were definitely not talked about when Bitcoin was first invented, and to this day I wouldn't say this is the list the vast majority of people in the crypto space would come up with if you asked them what the point of cryptocurrency is.
The way that article portrays it ties more into an allegory. Let's not forget that every participant is there voluntarily, and if they are genuinely suffering, they will choose to move on. Ethereum is a powerful connecting force that brings trust within the internet.
I emphasize with the arguments here but I differ in my conclusion for two reasons.
1. I don't own just Ethereum, its not a boat that I'm riding in, its one of many gambles I'm making.
2. The Ethereum network has generated a ton of really good stuff (Smart Contracts, DEFI, NFTS, IPFS, ENS, etc) despite whatever governance problems it has.
Cryptocurrencies are far from mature. There is no guarantee eth and btc will still be valuable in 10 years. They could be replaced entirely by new chains with different software.
10 years ago I didn't think bitcoin would be here today. Yet, here we are.
If we waited for everything to be mature, then we wouldn't have used web browsers in the early days. I remember when people were afraid to put a credit card into a website.
Bitcoin and ETH won't get replaced for the same reasons we ended up with Hacker News, Facebook, Google, Apple, Ebay, Amazon... network effects are amazingly strong.
Bitcoiners use the phrase: "The next bitcoin is bitcoin."
No playing field has been as level/fair as that of crypto.
The nature of crypto means 'The house' is more transparently verifiable & cost-efficient than.. anything else.
Be it tokens, prediction markets, nft markets etc.
It seems to be the one place where disconnected individuals anywhere on earth with little but an internet connection can get a decent seat at the economic table.
> The Ethereum network has generated a ton of really good stuff (Smart Contracts, DEFI, NFTS, IPFS, ENS, etc)
Did you miss out the word "exluding" at the beginning of that list?
That this gets upvoted to #2 speaks poorly of HN. Why on earth are we still talking about the DAO? This is a collection of tired, irrelevant arguments that entirely ignores product-market fit and a large, vibrant community of developers.
[edit] ah, of course. a bitcoin maximalist. how dare there be an alternative use-case for crypto that involves people using it. the thing bitcoin has going for it is a large community of peripheral people believing it will be the global reserve currency (it wont).
Nothing about that says product-market fit beyond the speculative use case - which I would agree does show spectacular product-market fit since it is proven there are tons of people willing to speculate and crypto provides an asset class with attributes that people are really craving (poor regulation, high risk and volatility, etc.)
It's literally the exact same arguments from 3 years ago. 3 years ago there were very few real apps/users on ethereum. At that time, ether was mostly a pet rock like bitcoin with smart contracts attached. That's simply not true anymore.
There is ether (the asset) and etheriumn (the chain), while usage of the latter accrues value to the former, the latter is what's important (and not the former). All that matters for these platforms is usage. There are other good level 1's with traction from users/developers (terra/solana specifically).
The idea that there's going to be only 1 blockchain for value transmission or that users really care about highly technical points about decentralization are laughable. People care about the apps, use-cases, and [jpegs of rocks](https://opensea.io/).
There are enough bitcoin maximalists afraid of ethereum to upvote this.
They know very well that eth flipping btc is the 'emperor's has no clothes' moment - instantly all memes about btc being a store of value, 'hard money' and similar turn into jokes, and what remains is btc itself: an unbacked inflationary coin, in which the only way to make money is at the expense of someone else.
At this point, the only thing that can stop the flippening after the merge is a government ban that specifically impacts ethereum (like they tried with the PoW-only exemption amendment).
I lost interest in Eth when the “code is law” law was broken. I’m glad I did. I don’t believe proof of steak is the correct solution to the energy required for proof of work. To be clear, a lot of good insight has come from Eth, but I’m not ideologically bought in anymore.
Recently I have been exploring Chia as a farmer. Rather than the ruling class being a group devs and random early miners, the ruling class is a (soon public) corporation. At least a corporation has a clear legal structure of existence in a capitalist society. I see it as a sort of anchor between a purely cyber community and the actual world we subject ourselves to. I can buy shares in a corporation if I want to participate in the ruling class. The ruling class has legal agency to increase the value of its share price, which is the dual of it’s the underlying asset. Farmers still make less over time but the logistics are clearly laid out in detail, and TX fees kick in to supplement. Maybe it too will all go up in flames, but until it does I’m along for the ride. I believe we can sustain a proof of work system that is orders of magnitude more efficient than constantly running sha. And personally I feel “crypto” has had enough iterations that it’s about time to pick an innovative one and throw some labor behind it.
There are way more HDDs lying around needing to be used than GPUs, though. Storage is so much easier to come by. File coin has structural problems like you cant mine filecoin without first buying filecoin to stake…
Chia seems completely brain-dead. Buying up HDs and SSDs to fill them with junk data and getting coins for that. In what universe does that make sense?
I'd rather support Bitcoin miners as they only cause an ASIC shortage, a SSD shortage is much worse for me.
This is overlong and pretty florid, but its conclusion (that a long record of forked changes, each being good for big ETH holders but bad for miners, is roughly equivalent to the self-dealing of wealthy insiders in the traditional financial world) doesn't seem wrong.
The distinction he makes between miners and holders seems totally arbitrary in my view, it's not like the miners aren't also holders. The more you mine the more you hold.
Anyone who thought differently when crypto appeared was most likely young and naive. If a system deal with effort credit, some will find ways, whatever rule you think they follow, to get more credit for less effort.
There s no solution, it s the basic of energy limitation: you have an enormous incentive to conserve energy until we can get so much more than we require with so little spending that it becomes irrelevant. But then, we ll find ways, probably, to spend so much energy that we ll reach the limit again.
A bit like in the 2000s when you kept doubling your disk drive space every year and still kept filling it at exponential rate :D
Why is it wrong? Ethereum has had the plan to move to proof of stake for years, and the purpose of the network is to serve its users not to enrich miners. We pay miners for security. That's great, but if we find a cheaper way to do security, there's nothing wrong with choosing a different security solution.
Miners are contractors. They have no stake in Ethereum's long-term success unless they become ETH holders as well.
Ether's price has risen exponentially. It doesn't make sense (and isn't necessary) to pay miners exponentially higher amounts of money to do the same job, thus the issuance reductions.
Making sense isn't equivalent to being justifiable. Imagine a FAANG telling their devs, "We're reducing your options, but that's okay because our stock price has gone up."
I don't see any inherent moral issue with writing an employment contract that way. Of course as a developer, I would heavily discount the value of options designed to work like that - which Ethereum miners should have been doing this whole time.
Software development is a pretty free market as far as labor markets go. If a developer doesn't like the terms of the contract they're offered, they can bail and work somewhere else.
With Ethereum, their "Minimum Necessary Issuance" social contract has been very clear in the docs since the beginning of the project.
> As a Bitcoiner I find these actions intolerable and unacceptable. I know none of them would ever be accepted in Bitcoin.
This sums up the whole piece in my view. Bitcoin development stagnated years ago exactly because nobody involved wanted to change/hard fork it to implement improvements.
For people who want a Bitcoin-like Ethereum with no DAO fork or staking there's Ethereum Classic.
Sure, it's just moving very slowly after the block size civil war. I remember the early years when the talk was about interesting developments instead of just the value.
> That is what bitcoin is supposed to be - sound money.
Bitcoin can't be used as money in most cases as transactions are too expensive and slow. It has failed its primary function. Instead of doing something about it, the notion of using bitcoin like money has been abandonded and it's merely a "store of value". That's until people stop valuing it.
Is cash money? What percentage of your transactions are settled in cash?
Money and payment settlement systems are not the same thing, although you could be forgiven for believing that. I use a credit card for 99% of my transaction volume, and credit cards are not money. The fact that the notional value of the transaction is denominated in dollars doesn't mean I am actually using dollars as the medium of exchange--the exchange is facilitated by a clearinghouse and my individual transaction may not even result in a transfer of money (actual dollars) between parties, if there is an offsetting transaction (or chain of transactions) within the same settlement period.
Despite the tagline from the whitepaper, it's always been clear to me that bitcoin was an Austrian-style sound money system and could not scale to be a network for small payments. I think bitcoin has remained consistent with the original vision and design.
I remember using Bitcoin to buy coffee in town back in the day (2014, 2015-ish). All the retailers stopped accepting it as payment due to the results of the scaling debate. Steam, WordPress, Microsoft and others. If its current design under the block size limit was clear to you, it very much wasn't clear to me back then.
Just making blocks bigger isn't enough to scale bitcoin to Visa levels, so making on-chain bitcoin payments work for small payments was never on the table.
It would have required a radical redesign of bitcoin to even have a chance of success, and that has always been off the table and has been left for new, experimental digital currencies.
> How many hardforks has the core bitcoin project seen in the last five years?
Can you elaborate on this - why would the core project care how many times it's forked? The forks shouldn't affect the core project at all, that's the whole point of having a fork in the first place. Or alternatively, if you like and use the fork, then you aren't on the core bitcoin chain anymore. Either way the main BTC chain doesn't care.
>why would the core project care how many times it's forked?
Some changes (eg. to the block reward schedule) are only possible on a hard fork as it makes the main chain incompatible with the pre-fork chain.
That's the philosophical difference between the projects: ETH is not afraid of hard forks and to this date, they have been uncontested. BTC never considers a hard fork and has had at least two major contested ones.
Do you have some technical definition for "contested" or are you using it as a generic term to describe how the forks were perceived by the rest of the community?
Well, of course I forgot the ETC HF, that one was indeed contested. But yeah, generic for a HF out of differences that cannot be reconciled and which leads to a viable new project like BCash, BSV, ETC.
The great part about cryptocurrency is that if you don’t want it, don’t buy it - don’t read about it - don’t do anything. It is a purely voluntary system. If you want to avoid US Dollars, it’s essentially impossible for most people.
Ethereum is and has always been the toy of Vitalik Buterin and his cronies. They control roughly 64% of all ETH. Everyone else is just share cropping suckers.
From what I've read and heard of Vitalik Buterin, he seems most unlikely to have "cronies". The reason Charles Hoskinson left the Ethereum Foundation is that Vitalik wanted it to be non-profit, whilst Charles wanted it to be commercial / for-profit.
Most of what I've heard of Vitalik paints him as having a saint-like aura (my own admittedly hyperbolic description). But then maybe we'd all appear that way if we had $billion resources at hand...
Vitalik is a saint in comparison to Hoskinson, but that doesn't mean Ethereum is sound money. It is what it is; lots of good innovation there, but sound money, it is not.
None of the cryptos are sound money ("money not liable to sudden appreciation or depreciation in value") except stablecoins on Ethereum. Bitcoin can easily lose 80% of its value in a month and no one would be surprised. Bitcoin is the biggest speculative bubble of all time. It absolutely has no utility (imagine if Bitcoin disappeared now - what would the world lose?).
Bitcoin can be sound money after the price stabilizes, which will probably take decades if it ever happens. Nothing else in the world ever could be sound money except commodity money, like gold, but I'd argue that bitcoin is better.
> Ethereum is and has always been the toy of Vitalik Buterin and his cronies. They control roughly 64% of all ETH. Everyone else is just share cropping suckers.
But they told me crypto would free us from centralized control! /s
Author is looking for perfection in what is essentially a Wild West.
I also think it’s asking the wrong questions in a way. Whether Bill Gates should have made billions or not whether he should be in charge and corporate structure is largely irrelevant to Silicon Valley crushing it.
Fairness equitability and consistency would be nice but is not compulsory at all
The only value argument of Etherium over Bitcoin is that you can have computation on the blockchain, which is a joke when you consider AWS and Azure exists. The rest are delusional details.
Could you explain precisely, how you might build a $350 billion plausibly neutral, open source, non-gated, cryptographically secure blockchain and smart contract platform with 100% uptime over 6 years on AWS and Azure?
Human greed is the problem. How much of promising tech, starts out so innocent till big money becomes aware of it or those who want to make a quick dime, tarnish principled thinking and action.
Cryptocurrencies are just as bad as the fiat they replace. The problem with fiat is that people use it as a high score to measure their own status/rank.
But it is also needed to pay people. But people only work if they get paid. You run into the money shortage problem that caused so much trouble in 2008.
There are good points here, but I think analogizing the situation into a class struggle within a society is both confusing and specious. Ethereum is not a civilization: it's a piece of FinTech.
If something is hard in theory, it's 10x harder in implementation. Complex systems have a lot of 'unknown unknowns' that can't be forecasted. Ethereum is $300B+ live network so every small change takes time to research, test, and implement. Migrating from PoW to PoS is like swapping out the engine of an airplane in mid-air.
If you ask the cryptocurrency subreddit, the best thing to do with any money you have[1] is to buy ETH at any price and stake it (i.e. lock it in and receive interest until ETH 2.0 is released). I find that absolutely mindblowing given all the complexity you're pointing out + the fact that there is no date and no clear explanation of what happens to the funds in the event of failure. And on top of this the fact that most people are doing the staking through exchanges because they don't have the required 32 ETH to do it themselves, it looks like a giant disaster waiting to happen.
And somehow Ethereum is one of the most positively viewed cryptocurrencies out there. I don't get it.
ETH2 is going to happen sooner or later… The beacon chain already works in production so it seems inevitable the devs will merge mainnet onto it. Not completely convinced about their 2021/2022 timeframe.
All the validator deposits are public data; how would they be destroyed? The funds will have to be unlocked at some point, people will demand it.
Did Ethereum ever make a promise that "code is law"? The references I'm finding are all in Ethereum Classic docs.
Fair point to the author for finding the dynamic nature of Ethereum's progression not to their liking, but it's a real reach to portray it as some kind of class conflict parable.
I think if anything the crypto-experiment has revealed is that an uncaring, cold machine doesn't meet the needs of the human condition. A person fat-fingers his life savings to null, a thief socially engineers someone's money, a bug causes assets to be trapped, etc. It's clear we need a better system that can service our imperfections.
and things like social wallets and trust networks as a response to those issues are emerging as the best way forward, less seed phrases and hardware wallets with tiny buttons. connecting with friends is the best security. turns out ethereum is a social network with a very fast uptake worldwide.
it shows us that community and support for one another is the Layer 0 that these things are built on top of. code isnt law, people come first. if we stick with that it could work pretty well.
Calling miners “the working class” is a misleading label no doubt chosen to instill sympathy. By that measure, factory owners in the industrial revolution were the working class.
There's plenty wrong with Ethereum, but casting miners as 'the working class' is a flawed analogy. The mercantile class would be closer to the mark. Notably, their hashing power is based in real world economic power and they extract an annuity from capital expenditure on mining operations and hardware.
I also question whether miners are really providing the labour power, as you might expect the working class to do. They build the roads and keep the lights on but the means of production of value is (or ought to be) the services provided by those writing functionality that makes the network useful, i.e. the smart contract writers. Whether one thinks smart contracts on Ethereum have any value is another question but that was at least the vision.
A move to proof-of-stake does not remove the role of miners/validators. Validators will still earn a reward from validating blocks. So it's not as if this 'class' is being disenfranchised totally.
Finally the social class analogy entails disjointness of classes, this is certainly not the case for miners, many of whom are major token holders, and some of whom are involved in governance (of course by miners we are taking about the humans controlling the mining rigs not the computers themselves)
> There's plenty wrong with Ethereum, but casting miners as 'the working class' is a flawed analogy.
Agreed.
Marx's working class consists of those who do not own means of production, and are therefore compelled to sell their labour.
Miners do not lack means of production; they operate expensive mining machinery. That machinery continues to run, and earn money for the miner, even while the miner sits on the beach. Selling their labour really isn't a good model for what's going on. Miners are just ordinary capitalists, exploiting a market opportunity.
And there's a fixed amount of mining labor to be done, requiring far less than 1% of the current effort spent. So why are the pay cuts a problem? (Especially if you chart payout in USD.)
Capitalists cycle:
Money -> Commodity(means of production) -> Money(profit/surplus value)
At least that is the bit that kind of sticked to me and made me realized in the west you want to do the second cycle.
Earn money by selling labor, live life as a cheap ass for a while use savings to become a asshole landlord.
Unfortunately, the second option becomes more and more difficult for most people. With increasing costs of living, saving enough money for investments often times seems impossible.
Of course this is kind of reductive and silly but I see the analogy as taking Ethereum as Money (abstracted labour power), there are those who have to put said labour power into the system, and those who don't. This too: "But the ruling class now feels that’s too much because it amounts to a lot of value for the work. So the ruling class changes the rule of 5 Eth per block to 4 Eth per block.", mirrors the contradiction of wages and surplus value in the capitalist mode of production. The thing is regardless of the form of abstracted labour power, those who hold large sums of a commodity are free to buy lots and make an easy turnover in the market world, resulting in easy power in most societies as well.
The miners, collectively, is also the group with the power to hard fork or not. So in some sense, they're the ruling class and the core developers are just proposing the changes to them.
This is a general misconception about how consensus works in blockchains. Miners can choose whether or not to adopt a "soft fork". A soft fork can't violate any existing rules, it can just introduce new rules.
A hard fork is allowed to violate existing rules, and gives you more flexibility in what can be changed. And miners do not have the power to decide whether or not a hard fork will happen. A hard fork is determined by the users, who have to upgrade their software.
If the software updates automatically, then the power of hard forking lies with the developers, who could just push the new code out via an automatic update.
Ah, I should have known better. I was misinterpreting from the article linked in the article where it says (about a fork), "Miners, exchanges, and node operators also had to agree to update their software."
The reality is that people sit together and try to make a deal that all parties agree on simply because disruption and uncertainty is not in the interests of any of the parties. This doesn't change the fact that the parties do not have aligned interests and therefore its a constant fight everything is slow and expensive because of that.
Kinda funny how this problem was solved before ETH even existed simply by removing the incentive for the hardware operator. No block rewards and no fees to collect aka no reason to fight over it. The only people who run the hardware without getting paid for it are the people who want to use it. They have aligned interest like a fast and cheap network and fast update cycles. And ofc no one who has to pay for the hardware and energy has any interest in PoW.
It is necessary for some miners to choose to use the post-fork software in order for it to work, but miners take on the task of mining due to financial incentives, and the users ultimately control those incentives. Miners only have a choice in the sense that they could collectively choose to abandon their profits as a matter of principle.
The miners do have the power to hard fork - they can choose to run a node that implements the fork
> A hard fork is determined by the users, who have to upgrade their software.
Who are 'the users' here? Light clients? Users of wallets? None of these have the power to adopt a fork, soft or hard. The collective action of the miners (or validators) defines which chains still retain liveness. For example in the hard fork between Ethereum Classic (ETC) and Ethereum (ETH) ETC was able to exist only because miners chose to to mine it. This in turn did give non-mining users the choice of how to distribute their demand and create extrinsic value for the ETC token. I wouldn't say this gives non-mining users any control over a hard fork since it happens after-the-fact.
> If the software updates automatically, then the power of hard forking lies with the developers
I don't know of a node distribution for Ethereum that works this way.
The core developers have power as in knowledge and power as in authority, the later being the traditional form of political power.
Anyone who runs a full node can decide any set of rules they want to follow. You can incentivize miners to mine on your fork by providing block rewards. If you pay people to do something, at least some of them will.
The ETC fork would have been successful at any non-zero support level from people with the ability to mine. And since any CPU can mine (just inefficiently), any fork can get a mining baseline. That may not give you a ton of security but it works.
People who run full nodes are the ones that decide hard forks.
Thanks for responding. So you are saying full nodes are the users? They can provide connectivity but full nodes that don't mine can't continue a fork (where fork is any fork including the original) without there being people willing to mine that fork. So that's why I think miners have the ability to fork.
> The ETC fork would have been successful at any non-zero support level from people with the ability to mine.
It would be economically irrational for people to send transactions to a fork with a single miner since that miner could unilaterally rewrite any transactions as they see fit.
This is why I think miners have the ability to control forking.
Forking a coin is free. Anyone can fork any coin at any time. Most miners will mine whatever makes money, but some may mine for a possible future payout or altruistic reasons.
A fork is generally considered successful if it carries economic value. That is decided by the amount of users transacting in the currency. Working exchanges are a requirement for this, but not enough (as has been experimentally demonstrated).
Not correct.
The software update that goes to the uses but if miners dont mine for the hard fork, then the user cant use it. Its a technical reality that they could update anyway and at least some miners would mine for them but that would just be causing a chain fork and 2 different chains. The miners have the power to decide where they mine. And user have the power to decide on which chain they operate on. They both have power with their choice. But the choice for user is limited to chains that actually exist. For for now only ETH and ETC exists but if there is demand for more chains because a significant portion of people disagree with the progress then more chains can fork off. This however requires miners who are willing to mine on a forked chain.
The power is split but the constant "fights" between the different parties (miners/users) is the reasons these fist-gen (PoW/PoS) blockchains can not be efficient.
There is and forever will be a misaligned interest between the two parties which drives up prices and slows down progress.
Software's auto-update feature is completely irrelevant to consensus. It obviously does not define who has the power at all. To update is always voluntary. Software devs dont technically have any power they have influence.
Any chain can exist with a single miner on it, and anyone can be that miner. Users do not need the consent of miners to execute a hardfork and migrate to a new chain. Miners do not control or determine hard forks.
This has been demonstrated empirically numerous times in crypto history, most notably the moment that >80% of the hashrate openly supported a hardfork that subsequently failed because it did not have user support.
Your node software decides what fork you run on. If someone can push an update to your software without your consent, they can choose to put you on a fork and you may not even realize it happened. This is why most full node software (including bitcoin and Ethereum) does not support automatic updates.
> The software update that goes to the uses but if miners dont mine for the hard fork, then the user cant use it. ... The miners have the power to decide where they mine.
This is based on the assumption that miners would rather choose to abandon their business as a matter of principle than mine on the most profitable chain, and also somehow convince any future, unaffiliated prospective miners to also do the same. How could they ever achieve that? Miners don't control where the financial incentives are.
You should probably read the the whole post not just one part and then assume something I never said.
The power is split between miners and user. A majority from both parties are required to determine where the network goes the rest are somewhat forced to follow. If no such majority can be found the network can fork and both chains can be profitable for miners.
I never said miners are in control, I disagreed with the parent who said users are in control - big difference.
What I am saying is that only users can determine which chain is profitable for miners. Miners only have a choice in the sense that they can choose to sacrifice profits on principle, which is not really a choice in the same sense as the kind of choice that users have.
No, this is wrong.
And the reverse is also wrong. A user can chose by principle too and scarifies cost if he has to overpay to attract miners to that chain. Does that mean its "not really a choice"? No, its exactly what choice means.
Also even at zero user if the token has value mining can be profitable.
But anyway these edge-cases are irrelevant. There is and will never be a situation where all miners and all user chose a different chain. Just the fact that some miners are users at the same time makes it impossible. The only thing important is that power is shared between the 2 groups and its a constant fight because of different interests. Even without miners when its fully PoS there will still be misaligned interests between the parties (users, hardware operators, stakes etc.)
Its an inherent flaw in the system because it relies on incentives which one party wants to maximize.
> By burning the working class’ money, the ruling class and wealthy class end up with a larger piece of the overall pie. It’s ingenious. Evil, but ingenious.
The arguments in the article would have carried more weight without the loaded language. Miners are more like banks in a fiat system rather than 'working class'. Pay cuts for middle-men means increase in efficiency of the system. Very evil indeed.
325 comments
[ 3.9 ms ] story [ 323 ms ] threadE.g., I've been wondering why a certain Bitcoin podcaster, who is very popular, has never mined a Bitcoin. He/she talks all day about "stacking Sats", but he/she only buys them. Reading this article made me realize that he/she might see him/herself as a member of the ruling class.
The people actually mining Bitcoin don't have time for podcasts.
Podcasts, Youtube, media in general are mostly dominated by people who don't actually do other work, because creating content for those platforms is extremely time-consuming.
Not to mention the ASICs, by the time end-users can acquire them they're usually outdated.
It would be more correct to call miners a Merchant Class. They exploit capital to make profit. Like merchants of old, they take risks that regulations (real-world and the "ruling class") won't impede profit.
Hardware gets outdated quickly as mining difficulty rises, so a timely exit is not difficult - wait until cards die, or offload them ebay.
> As a Bitcoiner I find these actions intolerable and unacceptable
Bitcoin has also forked, many times. Bitcoin Gold for example restored the ability to mine with GPUs. The "ruling class" decided that unless you had access to custom hardware, you could not be part of the "working class".
People can and still do mine Ethereum with the cards they did 5 years ago, and the difficulty is irrelevant to whether your hardware is outdated or not.
https://www.nicehash.com/profitability-calculator/nvidia-gtx...
This is a false comparison.
The bitcoin blockchain maintains the original monetary policy of bitcoin, which is effectively set in stone.
That is not true of Ethereum, and that is the purported problem with Ethereum.
(I was excited about Eth until I learnt its currency had persistent value...)
Imagine: a network where the only gains you get are from spending your money quickly. The anti-hodl. It would be completely worthless as a store of value or investment vehicle. Its only conceivable use would be as a fast and efficient transaction ledger.
Which is what I wanted out of blockchain to begin with! I'd be happy to support a network like that, even if my income was rapidly vanishing.
There's also a very crowded market for coins right now. Most will not take off. Even if coin X has perfect fundamentals, there's a self-fulfilling equilibrium where nobody buys it but instead buys coin Y which is slightly worse.
My argument is that in the long run, a very inflationary coin would not be attractive. Using it for transactions would rely on greater fool theory. You buy it so you can sell it immediately. But that means you must sell it to either (a) someone who holds it and loses half his money, or (b) someone who buys it and sells it immediately, again to either (a) or (b)....
I'm thinking that inflation would be priced in as platform fees for exchanges. Thinking of transactions in terms of throughput, the question is "how long do I have to store EUR in INF to be able to match an EUR sell with a buy." The transaction fee would be (at least) the inflation over that range.
The notion that blockchains should produce value by competing for investment is exactly the wrong idea that I'm trying to avoid.
An inflation half-life of a week is probably excessive. It really only has to be bigger than the IRL currencies it interfaces with. (Which in turn only have to be bigger than the value growth in their market.) But proposing a high inflation like that puts the focus of efficiency and monetary gain on improving transaction performance, which is imo where it should be.
Also having a high inflation lets you limit the size of the ledger - eventually, old transactions simply become irrelevant by being too comparatively small to matter. You could even reward people for erasing their historic transactions - ie. allow them to roll several historic transactions into one, as a way to reduce the inflation tax. (Or phrased differently, tax ledger entries.)
In fact, crypto is perceived it seems to be an absolute value stashing system where you collect your reward and store it for free until you want others to produce effort for you.
But I refuse to produce effort for a guy who spent his energy 50 years ago and just throw at me a few gold coins to do his bidding. He wants me to work, he needs to pretend to be doing something too.
Yes but apparently you need crypto to have censorship-proof cheap transactions that finish quickly.
In theory, you can do that on a fiat currency. In practice, my transactions take days.
It died because you cannot start with the currency. It has to be a local community project. There are lots of complementary currencies on this planet but only regional currencies end up successful.
Cryptocurrencies are problematic because they don't foster a face to face community. The idea is that you are taking advantage of a sucker 1000miles away from you.
[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
https://etherchain.org/burn
We're getting 0.15-1.1 ETH burned per block, while just the static reward is 2 ETH.
https://etherchain.org/burn
https://bitinfocharts.com/ethereum/
https://old.reddit.com/r/ethereum/comments/oyhzop/ethereum_b...
[1] https://en.wikipedia.org/wiki/Dogecoin#Currency_supply
Both basic income projects. Proof of humanity ubi tokens are more easily tradeable and meant to provide Sybil resistance to eth projects, but circles has a nice self contained design which is probably more interesting as a form of basic income/ community currency.
It seems to me that this is actually the correct thing to do. I'd rather the core devs take their time and iron out the issues instead of being incentivized to play fast and loose with a system that manages billions.
As a very large miner, I was always for 1559 because I understand the underlying mechanics.
The miners who I watched were just kind of bandwagon on the theme of "wait, I'll earn less cause you're burning my fees"?
Which in reality isn't entirely the case (price and usage have gone up, along with the lack of wallet support).
https://cryptobriefing.com/ethereum-miners-protesting-eip-15...
>As a very large miner, I was always for 1559 because I understand the underlying mechanics.
I don't know what mechanics you think others didn't understand. Your profitability has dropped and the move is basically moving miners' profit to the largest holders (e.g. everyone who pushed for the change). It's not like the fees have dropped since EIP-1559 if that's something you thought the change will bring for some reason.
The mechanics I'm referring to are in the 50+ page document that I read, that I'm sure most people (miners) are not even aware of: https://hackmd.io/@timbeiko/1559-updates/https%3A%2F%2Fhackm...
As for profitability changes, that's almost impossible to measure right now. There is too many variables. One is that there isn't any wallet support for 1559 yet (MM came out today and is apparently, um, lacking). People are still over paying for transactions. Difficulty + price changes + pool luck + changes in hardware stability also make things nearly impossible to track accurately. I have a margin of error, but it doesn't look too bad right now actually.
They included the biggest miners and overall > 50% of the mining power as far as I could tell.
>The mechanics I'm referring to are in the 50+ page document that I read,
I wish you'd specify what mechanic in particular you think others misunderstood and you didn't, as I included the main ones from their arguments.
Point #1 is a big one. A huge number of people thought that fees would go down.
One key one is price, another is that most miners barely understand how the network works and therefore couldn't exert any force even if they wanted to.
Pools concentrate the force, but miners can move to whatever pool they like the best (usually the most profitable... which is where the main store of wealth is)...
disclosure: large scale eth miner
This road map comes to mind: https://twitter.com/VitalikButerin/status/133392262085774540...
It's very outdated now, that's not the point. The point is that every circle on the road map is a very complicated project in and of itself that needs tons of research, development and testing to be implemented properly. Just the code itself is thousands of commits.
Argument 1: Proof of stake concentrates wealth more than proof of work.
You can make that argument, but POS advocates have for a long time argued that proof of work mining has more economies of scale than proof of stake and therefore the opposite is actually true. Equating proof of work miners to the working class & stakers or developers as wealthy elites or rulers is so massively cringe it's tough to even read.
Argument 2: Ethereum is in active development, is planning to switch to proof of stake, has things like difficulty bombs, and therefore is somehow dishonest.
Decentralized blockchain communities come to consensus around different values and philosophies. Eth has for a long time been a community which values consistent iteration and improvement around fundamental aspects of the protocol. The transition to proof of stake has been known for years and years. There's nothing dishonest about any of this. If anything the community has been asking for faster iteration to solve high transaction fees and improve usability. Bitcoin's development stagnation works fine for bitcoin. Ethereum is clearly making the right move in continuing to improve the base protocol. Which as you mention is a huge, extremely complicated undertaking.
The article goes on to some cognitive dissonance about how Ethereum doesn't deliver on promises despite the fact that it just delivered a major protocol update last week... might as well throw in the dao hack and icos and whatever else in there and see if anything sticks. I guess with nothing to develop or build, bitcoin maxi's have a lot of time to ramble incoherently about Ethereum. And they probably always will.
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Now that that is out of the way, I don't necessarily believe that Argument 1 is inherently true (I know you aren't necessarily supporting it but I figured I'd throw my 2p in).
Ultimately Proof of Stake is just moving from a system with an external resource to one with an internal resource. This theoretically allows you to largely divorce the system from the harsh realities of the outside world (whose rules those external resources are bound to). By isolating the system you can better structure the rules of the game (from a game theory perspective) without being influenced or bound to rules from the outside system. Of course this isolation is only as strong as the network (larger market cap makes attacks harder) but generally once the network reaches scale it is largely independent of the outside world.
How a system influences the distribution of wealth ultimately depends on those rules in the system and by PoS largely granting the system the ability to decide those rules for itself, you can theoretically design a system with an expected steady state at or around the middle class at which the system can help lift those with less wealth up and weigh those with more wealth down. Balance it incorrectly and you run into issues one way (concentration of wealth) or another (lack of staking support opening up risks for attack) but theoretically it can be done right.
One of the key features of that balance is that wealth is worth the same whether it is held by many people or one person. It should be just as viable for a thousand people to lend 100 dollars as it is for a firm or wealthy individual to lend 100k with both groups exposed to the same amount of risk all other things the same.
Various mechanisms of the network including staking (including delegation), access to a democratically controlled treasury, first class support for governance primitives, and other such features are essential for making such a system work. Proof of Stake on its own may generally provide an accrual of wealth but in combination with the other forces on the network it should be perfectly viable to create a network that promotes distribution towards a reasonable steady state (with deviations due to merit of the individuals or just outright luck and not maintaining such deviations long term).
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/rant
I'm generally pretty cynical but no matter how hard I dig into it, I can't find a reason why PoS shouldn't be one of the last pieces of the puzzle to produce such a system and if it's even just a chance I think it's exceptionally valuable that we pursue it. Or maybe I'm just a crazy Crypto-LibSoc. ¯\_(ツ)_/¯
You should take a look at RocketPool. It is a project that will introduce decentralized staking pools allowing people with >0.01 ETH to trustlessly stake (except for smart contract risk, of course).
Staking services like RocketPool just bring the idea to ETH but if you were early, you can stake on your own.
Lido for example, a staking provider, already keeps their new deposits in custody of a contract like this.
I am very optimistic about Ethereum. It is not perfect but it is massively and consistently improving. The past few years, all crypto innovation was incubated within the Ethereum community.
My understanding of the changing of the rules "as you go" is that it's based on the reality being faced by the system. Bitcoin's proof-of-work is simultaneously one of it's strengths and one of its weaknesses, and Ethereum has chosen to move from PoW to PoS because of the belief that it's the right path to follow in attempting to solve the problems the system is facing in reality.
I don't think the "working class" vs. "ruling class" analogy is particularly fitting. However, to continue the analogy, the profitability of Ethereum mining (from what I've heard) would have allowed pretty much all of the early "working class" to have climbed the social ladder to "ruling class" if they held onto some percentage of their earnings (you know, like "savings" or "investments" in this real-world analogy). If the "working class" believed in the longevity of the project they've chosen to work for, wouldn't they see the investment opportunity? Otherwise they're just there for the immediate profit, and there's no long-term contract or agreement that's been broken. The system is evolving, like what happens in the real world.
> As a Bitcoiner... > We wouldn’t dare... > We would never... > doesn’t have a ruling class to take advantage of other classes
Bitcoin Cash, Bitcoin Gold, Bitcoin Satoshi Vision. Take off the rose-coloured glasses, "your community" isn't sunshine and roses either.
Personally, I think PoW may be what brings Bitcoin down in the long-term.
I think this is unfair. These are splinter communities. It's like critiquing Ethereum's community by pointing at Ethereum Classic and Binance Smart Chain.
>Personally, I think PoW may be what brings Bitcoin down in the long-term.
I pretty much agree with this part. I think it'll probably cause very serious issues for it over the next decade. I predict they'll actually eventually move off of PoW or drastically alter the PoW algorithm, but only after many years of infighting and stubborn refusal to consider the possibility.
That's exactly what the article did.
Ethereum is the cryptocurrency I personally like the most, but I do find supporters tend to downplay just how controversial that incident was.
> This time the working class has their pay reduced from 4 Eth to 3 Eth per block, a 25% pay cut. Miners now earn 40% less per block than at the time of the community’s constitution, which promised that code was law, and which the ruling class later said they would break only once, for what was an especially good reason. But the code is law promise has now been broken so many times people expect it to occur at regular intervals and even worry that “progress” is slowing down if there aren’t frequent enough hard forks (to break that promise yet again).
The "code is law" is not some universal absolute. Blockchains have always been forkable. But a chain can't have a contentious fork without a cost and it becomes costlier and riskier to do later in a chain's life.
Using the original article author's analogy, the "working class" are adding their own percentage to the retail price and taking those profits home.
They typically don't have the on-chain analysis or skill to reorder the transactions in the highest extractable way, so people bid for these opportunities through side channels they signal the miner to do (off-chain) based on the mempool (backlog) of transactions. Miners profit from this activity and in some cases these profits exceed the 2ETH per block issuance. The class analogy is strained and doesn't fit at all. These are only possible because Ethereum has a rich application layer (and if anyone is 'working class' it's the users, devs and dapps on the chain). But these profits more than made up for any offset in EIP1559 losses.
With PoS, the pay for miners is planned to be cut from 3 eth all the way down to 0, and that's great that Ethereum will become more efficient in that it no longer needs so much compute time spent on it. Ethereum will switch to needing stakers to provide a service to it that they're paid for, but if people designing Ethereum knew a way to not require that while still staying decentralized, then that would also be a great upgrade.
I think it's fair that if you've purchased specialized mining equipment, you expect the ROI you were promised. Doesn't seem strange.
> Ethereum functions on proof-of-work and needs some people to sell their compute time and electricity
So compensation for work. If not 'workers', you could call them 'investors', or perhaps 'sole traders', or 'merchants', not sure what the best analogy would be. To be fair, I don't necessarily put them in the same class as people making socks in a sweat shop on slave wage. The down-trodden Ethereum miner is not someone I lose sleep about.
* It uses GPUs.
* ROI in terms of ethereum is basically irrelevant. Real ROI depends on the bouncy crazy chart.
* Was there not enough warning before the changes?
Many miners buy purpose built servers for crypto mining.
> Was there not enough warning before the changes?
That's the main plaint of the article, and reiterated multiple times. The article claims that the prices was dropped with 2 of the forks, each time it was promised (including at the very beginning) that changes would never be made. Each fork seemed to be of gain to the people who were part of the ICO, but at an income loss to miners. There were several broken promises of no further forks.
I didn't ask whether promises were eventually broken, I asked how long the warning was.
Also if we talk about the promises, I'm pretty sure proof of work was supposed to be dead years ago. The current state is more than promised.
> I'm pretty sure proof of work was supposed to be dead years ago. The current state is more than promised.
That's a fair point
ROI was never promised. Ethereum has always had a "Minimum Necessary Issuance" policy. Keeping issuance constant would be deviation from the policy, reducing it when possible is in line with the policy. From the docs:
> Ethereum's Monetary Policy is defined by the rewards that are paid out by the protocol at any given time. Ethereum's current yearly network issuance is approximately 4.5% with 2 Ether per block and an additional 1.75 Ether per uncle block (plus fees) being rewarded to miners.
> Ethereum does not have a fixed supply because a fixed supply would also require a fixed security budget for the Ethereum network. Rather than arbitrarily fix Ethereum's security, Ethereum's monetary policy is best described as "minimum issuance to secure the network".
> Ethereum has had a history of reducing issuance to these estimated minimums and the network has never increased issuance. The move to proof-of-stake is also part of Ethereum's effort to reduce issuance to minimum amounts without sacrificing security.
Miners are free not to upgrade every time a new protocol version is proposed. Why do they upgrade then? If consensus was established around the older set of rules, that would be it. But instead there's consensus around the newer rules. And that's simply because miners individually decide that the newer rules are better, for whatever reason.
Miners don't earn 40% less, they earn 180000% more than back then. Of course not individual miners, but as a "working class".
It forces node operators to come to consensus on whether to fork alongside the developers or to fork in a different direction. It removes the option of doing nothing and letting the Ethereum chain stagnate.
If you will hard fork every time it's convenient, you don't have anything stable.
If they did it once, that would be one thing. But now it's happening semi regularly.
Difficulty bomb is pretty much a marketing lie by now.
Creating a hard fork isnt easy as you make it out to be
One response is that the promise was not well thought through. The idea was to replace "rulers" (human beings who make decisions to take care of a system) and "law" (written rules interpreted by humans) with code. But (a) code is written by humans who make mistakes; (b) the world changes, and systems need to update to respond to that; (c) somebody has to be responsible for dealing with a and b. As a result, currencies need central organizers to look after them. And those central organizers need to be motivated, i.e., paid. Old-fashioned currencies have sovereigns to back them, and the sovereigns are paid by the monopoly of taxation and/or the ability to issue money. Inefficient, but it works.
From this perspective, bitcoin et al. look like technical solutions to social problems. In particular, bitcoin is designed to have nobody taking care of public goods problems on its behalf. That's a flaw![1]
[1] https://wyclif.substack.com/p/thought-bubble-defending-bitco...
"Commonly cited estimates range from 39% to 73% renewable energy. Jesse Morris, CEO of non-profit Energy Web says most estimates find 20% to 50% of bitcoin is powered by renewable energy, but all available numbers are based on self-reported data, which is unverifiable. 30 June 2021"
My inner optimist is satisfied that the renewable percentage is constantly growing.
For example, a region might have 50% of its power from hydro and 50% from gas, but 0% of new power plants are hydro and 100% are gas. In such a world, adding a new electricity consumer to the grid causes 100% gas emissions, even though "50% of power is clean hydro." The proper attribution really ought to be the causal attribution, which typically means looking at the marginal source of power rather than the average.
I know this is a complicated topic. Entire PhD theses have been written on modeling the emissions impact of EVs, and there's a healthy debate of how to best calculate the 'causal' impact.
all bitcoin mines are is a proof of investment for the purposes of divvying up entries in a decentralized periodic lottery where the probability of winning is proportional to ones investment in equipment and energy.
is it really truly impossible to efficiently simulate this (specifically the economics, so that existing players don't revolt) while maintaining decentralization in the consensus algorithm?
it seems like there could be a technical solution, but the harder problem is building political consensus in a decentralized world... sort of like getting the global economy off of fossil fuels...
(c) I actually disagree with. Decentralized governance is a very interesting subject, and some cryptos like Tezos are governed quite decentralized in many ways.
Right now I'm really confident in how Ethereum is governed, with the "old-fashioned" open-source development model, where everyone can participate, but core devs have the final say. However, decentralized governance may be something they implement in the future.
[*] Slightly harsh, see comments below.
Whenever crypto enthusiasts tell me about DeFi governance, I get excited about the possibilities.
Then, I actually take a look at some of the group decisions, and literally all of them are crypto/coin-related, and don’t deal with any /real/ or human problems…
https://app.uniswap.org/#/vote/1/1
Of course the proposals are still heavily focused on internal/ecosystem development but there's an increasing focus on building platforms for people in developing regions as well. There has generally been a heavy focus on improving connectivity and access to affordable financial services within the African continent however recently there's been slowly growing focus on other regions with large unbanked or under-banked populations.
With the amount of money that is allotted via the treasury for the Cardano ecosystem, Catalyst (and eventually proper on-chain governance when it evolves into that) has funding to comfortably run it's 6 week cadence funding rounds indefinitely at a rate of 15 million USD per round once it finished scaling up. As the network grows the scale will likely increase but regardless I think with the focuses the community has (particularly thanks to West Africa Decentralised Alliance) we'll see increasing focus on improving infrastructure and access in developing regions.
And while you could argue that many of the solutions proposed have some net positive effect flowing back to the ecosystem, generally the focus has been on connecting people rather than driving traffic to the network.
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Sorry if that got a little long winded. It's a cool project+community and we've been working really hard to avoid the toxic coin maximalist & self-centred behaviour that's become so incredibly common in the space.
BTC maximalists are quasi-religious in my experience but Cardano just seems to recognize the inevitable ascension of the blockchain and is building for that future, very similar to Ethereum.
Maybe he's full of it; I've encountered other comments criticizing him but none that were deifying.
The Project Catalyst community, the official IOG developer discord, and even the Cardano subreddits (r/Cardano, r/Cardano_ELI5, r/CardanoDevelopers, etc) to a less extent aren't caught up in this cult mentality so much. When Charles says something stupid, innapropriate, or unbecoming, people are not afraid to address it in these spaces. On r/CryptoCurrency or on twitter it's a different story but Twitter is a cesspool (especially for any cryptocurrency) and while we try to call out the zealots on r/CC, it's not particularly easy.
In those dedicated Cardano spaces though, there is a marked effort to avoid the cult mentality and redirect that energy towards focusing on actual projects.
Very few people (in these communities) have the belief that somehow Cardano is going to be the dominant cryptocurrency or is going to "take over the world" so to speak. There is a strong belief that the project will be successful and a strong ecosystem is forming around it but not that it renders other chains irrelevant or that it must grow at any cost including via the minimisation or attacking of other networks. The general consensus is that it will make a strong showing and settle into a reasonably solid position in the greater financial ecosystem where it'll be intertwined with and coexisting with legacy financial systems and the other major cryptocurrency networks.
TLDR: Every topic/space has zealots unfortunately but looking at their core communities I've found Cardano to be generally fairly resistant to this behaviour. It's not a perfect community by any means but out of all the communities I'm involved in, I've seen more people in the Cardano ecosystem go out of their way to walk others away from maximalist behaviour or zealotry than any other community. I've been around for quite a while and I've seen how the different communities have evolved so I like to believe I've gotten a reasonably comprehensive view of the communities but no person can see everything and in the end this is all anecdotal experiences.
Could you maybe provide some examples of these /real/ problems they want to focus on? No DYOR, since you seem to be actually involved in the project.
Providing banking services for under-banked regions is yet again, for the crypto. Avoiding KYC is not a feature; I would argue that developing countries need robust infrastructure that incorporates societal laws, for positive outcomes.
Catalyst just recently funded a proposal for a decentralised pharmaceuticals project that is initially basing out of Southern(?) African nations (primarily SA atm I believe). Initially I believe it is focused on aggregating the information and technology necessary for some common life saving medications. The end goal is to provide easy access to process knowledge so as to reduce the barriers of entry for local organisations to start (or improve) production of and access to medications. This project is definitely a bit of a long shot and it'll need more funding than what it got so far but provided their regular reporting looks good, odds are they'll be able to come back for additional funding rounds until they can ramp up to a sustainable model. IDK if it'll work but I wish them the best.
Another proposal was funded to attempt rolling out food traceability solutions in I think Western Africa to help farmers get easier access to global markets (rather than being stuck selling to a megacorp that then resells for much higher).
Additionally, the next funding round has a category dedicated to projects that are focused on micro-finance on the African continent (think Kiva loans) which has the potential to significantly improve the lives of farmers and people starting small businesses.
I would go into the other Project Catalyst projects more but Catalyst is still in it's early stages (scaling up is happening but it won't be at 100% until the end of the year) so there aren't a tonne of funded projects overall yet. There were some other projects that didn't get funded but they generally had issues that need to be resolved before they are really even worth discussing. We are still ironing out some of the issues with the whole process so it's been a bit of a bumpy road so far.
Also of note is World Mobile. They are in the same space and are rolling out a decentralised ISP network in Tanzania focused on providing at least basic wifi connectivity to rural villages.
Of course all of these projects are generally aiming to produce some kind of income at the end of the day but that's not inherently a bad thing as it promotes making the projects sustainable (rather than relying on outside funding). Additionally one of the goals with these projects is to try and jump start or otherwise stimulate the economies they are targetting so approaching from a business approach rather than a purely altruistic approach could potentially yield better results.
Also they all generally use cryptocurrency/decentralised tech in some capacity but it's not like the cryptocurrency itself is the focus. The community has a cryptocurrency focus so it's common to see people approach the solutions from that perspective.
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> I would argue that developing countries need robust infrastructure that incorporates societal laws, for positive outcomes.
I agree and generally that's been the consensus in the community as well. The overwhelming theme has been to try and be as non-disruptive (in a negative sense) as possible. Progress is slow if it's to be successful in most cases and the last thing you want to do is to cause upset in the local communities. As an anecdote, at least in the Catalyst community all the projects I've seen that are "boots on the ground" type projects have had a strong focus on doing things by the books and not accidentally stepping on any toes along the way.
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I hope that addresses everything. If you have any questions let me know. I'm a bit strapped on time so I may not be on HN for a day or two but I'll eventually be around and I'll respond when I can.
This sound like a worthwhile project which could be run by a group of passionate supporters. Why does it need a blockchain?
It's mostly just a convenient and transparent way to fund R&D as well as to allow supporters/participants a controlling voice in the operation of the organisation.
Here's a link to their proposal. You may have to create an ideascale account to access it but if that's the case and you don't want to do that, let me know and I can mirror it over in a comment here.
https://cardano.ideascale.com/a/dtd/Africa-Opensource-Pharma...
For sure it will always be voted on something that is good for the chain or for the token. When its good publicity for a chain to vote for charity-baking you could solve human problems.
This is their mission, and the rest of the website focuses on ID and such services. Not one mention of poverty alleviation.
sybil-proofing in blockchain systems opens the possibility for any person or community to take a shot at implementing UBI. Could someone succeed in creating a token that retains some level of value long term and also consistently tops up at some rate in everyone's wallet? Beats me. But sybil-proofing is absolutely blocking issue on that front.
Making this token retain some sort of value is of course an entirely different problem, and I don't have strong opinions on whether someone might pull it off.
How stagnated is Bitcoin development? Yeah it is not progressing super fast, but I think it is still progressing. Taproot has been accepted by miners and will be activated this year. Improvements are being done.
As Bitcoin is the biggest crypto by market gap, I think risk-aversiveness is a good thing. While I was initially a big blocker, now I think that going without a hard fork was probably quite a good idea. Bitcoin still works nicely and I still use it a lot, now I just use LN transactions in addition to onchain txes.
And what's the next major improvement on the cards for Bitcoin after Taproot? I haven't heard much, and that is worrying in and of itself IMO.
Half of this article is complaints about how Ethereum is moving too slowly with the PoS transition. They're certainly not of the "move fast and break things" mindset.
in fact, i would even argue that btc's stance is closer to middle ground as they are clearly working towards making it easier to run all sorts of wild experiments in the upper layers while protecting and minimizing what's going on in the base layer.
You can't. Be serious.
What percentage of internet transactions are performed in Bitcoin? 1%? 0.1%?
it is really sad state of affairs when you only consider something as not stagnant when it's constantly putting people's money at tremendous risk.
at least the market seems to understand it.
It makes Bitcoin look like an anti-technology.
Do you mean voting? Has been around since ancient Greece.
The problem with Bitcoin at al is that they propose wrong solutions to ill defined social problems. Absolutely no real macroeconomic insight was put in the initial bitcoin halving block reward. Later adopters invested it with magic ability to forever stop "inflation", ill defined as taxation through monetary expansion. What resulted was a highly speculative asset that even 10 years later shows no signs of macrostability and is prone to losing 50% of its value in a single trading day. The social costs of using such a monetary unit day to day would be orders of magnitude higher than any reasonable inflation.
Another ill defined problem was financial privacy. In most cryptos, there is no way to socially cooperate to reliably limit financial privacy of bad players. What you get is an excelent system for teleporting a wad of cash across borders - if you can stomach the volatility. And it just so happens there is a substantial "market" that requires this laundry service and would gladly pay 10% or so to transform illicit gains into "crypto investements".
Was it? Most of these goals were definitely not talked about when Bitcoin was first invented, and to this day I wouldn't say this is the list the vast majority of people in the crypto space would come up with if you asked them what the point of cryptocurrency is.
The way that article portrays it ties more into an allegory. Let's not forget that every participant is there voluntarily, and if they are genuinely suffering, they will choose to move on. Ethereum is a powerful connecting force that brings trust within the internet.
I've got a bridge to sell you when you're ready
In case anyone is not familiar with the phrase : "I've got a bridge to sell you when you're ready"
(1) A con artist who sold a bridge. https://en.wikipedia.org/wiki/George_C._Parker
Not to be confused with :- (2) Rumoured that the wrong 'London' bridge was sold to Arizona (vs Tower Bridge) https://www.history.com/news/how-london-bridge-ended-up-in-a...
It could be argued that both apply - but I'm not getting into that argument !
1. I don't own just Ethereum, its not a boat that I'm riding in, its one of many gambles I'm making.
2. The Ethereum network has generated a ton of really good stuff (Smart Contracts, DEFI, NFTS, IPFS, ENS, etc) despite whatever governance problems it has.
Cryptocurrencies are far from mature. There is no guarantee eth and btc will still be valuable in 10 years. They could be replaced entirely by new chains with different software.
If we waited for everything to be mature, then we wouldn't have used web browsers in the early days. I remember when people were afraid to put a credit card into a website.
Bitcoin and ETH won't get replaced for the same reasons we ended up with Hacker News, Facebook, Google, Apple, Ebay, Amazon... network effects are amazingly strong.
Bitcoiners use the phrase: "The next bitcoin is bitcoin."
But honestly:
No playing field has been as level/fair as that of crypto.
The nature of crypto means 'The house' is more transparently verifiable & cost-efficient than.. anything else.
Be it tokens, prediction markets, nft markets etc.
It seems to be the one place where disconnected individuals anywhere on earth with little but an internet connection can get a decent seat at the economic table.
https://github.com/libbitcoin/libbitcoin-system/wiki/Proof-o...
https://hugonguyen.medium.com/proof-of-stake-the-wrong-engin...
https://hugonguyen.medium.com/work-is-timeless-stake-is-not-...
https://medium.com/hackernoon/sharding-centralizes-ethereum-...
https://blog.lamden.io/turing-incompleteness-and-the-sad-sta...
[edit] ah, of course. a bitcoin maximalist. how dare there be an alternative use-case for crypto that involves people using it. the thing bitcoin has going for it is a large community of peripheral people believing it will be the global reserve currency (it wont).
And since I'm committing to this literal shitpost, the proof-of-steak misspelling is entirely appropriate to the amount of salt in the article.
There is ether (the asset) and etheriumn (the chain), while usage of the latter accrues value to the former, the latter is what's important (and not the former). All that matters for these platforms is usage. There are other good level 1's with traction from users/developers (terra/solana specifically).
The idea that there's going to be only 1 blockchain for value transmission or that users really care about highly technical points about decentralization are laughable. People care about the apps, use-cases, and [jpegs of rocks](https://opensea.io/).
At this point, the only thing that can stop the flippening after the merge is a government ban that specifically impacts ethereum (like they tried with the PoW-only exemption amendment).
Recently I have been exploring Chia as a farmer. Rather than the ruling class being a group devs and random early miners, the ruling class is a (soon public) corporation. At least a corporation has a clear legal structure of existence in a capitalist society. I see it as a sort of anchor between a purely cyber community and the actual world we subject ourselves to. I can buy shares in a corporation if I want to participate in the ruling class. The ruling class has legal agency to increase the value of its share price, which is the dual of it’s the underlying asset. Farmers still make less over time but the logistics are clearly laid out in detail, and TX fees kick in to supplement. Maybe it too will all go up in flames, but until it does I’m along for the ride. I believe we can sustain a proof of work system that is orders of magnitude more efficient than constantly running sha. And personally I feel “crypto” has had enough iterations that it’s about time to pick an innovative one and throw some labor behind it.
https://www.backblaze.com/blog/chia-analysis-to-farm-or-not-...
Filecoin is a more viable and useful option imho.
Why do you consider this a structural problem?
If you fill disks full of junk, you're increasing the write wear on those disks. Despite the rumors, GPUs don't just wear out.
Please don't, it's bad enough for GPUs don't take my dinner too.
I'd rather support Bitcoin miners as they only cause an ASIC shortage, a SSD shortage is much worse for me.
There s no solution, it s the basic of energy limitation: you have an enormous incentive to conserve energy until we can get so much more than we require with so little spending that it becomes irrelevant. But then, we ll find ways, probably, to spend so much energy that we ll reach the limit again.
A bit like in the 2000s when you kept doubling your disk drive space every year and still kept filling it at exponential rate :D
Ether's price has risen exponentially. It doesn't make sense (and isn't necessary) to pay miners exponentially higher amounts of money to do the same job, thus the issuance reductions.
Software development is a pretty free market as far as labor markets go. If a developer doesn't like the terms of the contract they're offered, they can bail and work somewhere else.
With Ethereum, their "Minimum Necessary Issuance" social contract has been very clear in the docs since the beginning of the project.
This sums up the whole piece in my view. Bitcoin development stagnated years ago exactly because nobody involved wanted to change/hard fork it to implement improvements.
For people who want a Bitcoin-like Ethereum with no DAO fork or staking there's Ethereum Classic.
I wouldn’t consider that stagnate.
What we should think of as constituting sound money has not changed since 2008.
That is what bitcoin is supposed to be - sound money.
Ethereum is supposed to be something else - and it makes sense for Ethereum to "innovate" much more than bitcoin does.
Bitcoin can't be used as money in most cases as transactions are too expensive and slow. It has failed its primary function. Instead of doing something about it, the notion of using bitcoin like money has been abandonded and it's merely a "store of value". That's until people stop valuing it.
Money and payment settlement systems are not the same thing, although you could be forgiven for believing that. I use a credit card for 99% of my transaction volume, and credit cards are not money. The fact that the notional value of the transaction is denominated in dollars doesn't mean I am actually using dollars as the medium of exchange--the exchange is facilitated by a clearinghouse and my individual transaction may not even result in a transfer of money (actual dollars) between parties, if there is an offsetting transaction (or chain of transactions) within the same settlement period.
Bitcoin was originally invented as a "peer to peer electronic cash system". The fees have made it impossible to use it as such for quite some time.
It would have required a radical redesign of bitcoin to even have a chance of success, and that has always been off the table and has been left for new, experimental digital currencies.
Bitcoin has been incapable of doing a hardfork for whatever reason for a while.
That's why it will disappear sooner or later. If you don't evolve, you die.
Can you elaborate on this - why would the core project care how many times it's forked? The forks shouldn't affect the core project at all, that's the whole point of having a fork in the first place. Or alternatively, if you like and use the fork, then you aren't on the core bitcoin chain anymore. Either way the main BTC chain doesn't care.
Some changes (eg. to the block reward schedule) are only possible on a hard fork as it makes the main chain incompatible with the pre-fork chain.
That's the philosophical difference between the projects: ETH is not afraid of hard forks and to this date, they have been uncontested. BTC never considers a hard fork and has had at least two major contested ones.
There is no problem with Ethereum.
I can't entirely opt out of crypto because people around me are making or losing (mostly losing) money it.
Mining also pollutes air that I breathe and accelerates climate change.
Regardless of whether you think these external effects are worthwhile, they exist and are unavoidable.
Most of what I've heard of Vitalik paints him as having a saint-like aura (my own admittedly hyperbolic description). But then maybe we'd all appear that way if we had $billion resources at hand...
The actual real exciting stuff regarding the cryptos is here: https://ethereum.org/en/dapps/
But they told me crypto would free us from centralized control! /s
I also think it’s asking the wrong questions in a way. Whether Bill Gates should have made billions or not whether he should be in charge and corporate structure is largely irrelevant to Silicon Valley crushing it.
Fairness equitability and consistency would be nice but is not compulsory at all
But it is also needed to pay people. But people only work if they get paid. You run into the money shortage problem that caused so much trouble in 2008.
And somehow Ethereum is one of the most positively viewed cryptocurrencies out there. I don't get it.
[1] This is only a mild exaggeration.
All the validator deposits are public data; how would they be destroyed? The funds will have to be unlocked at some point, people will demand it.
This seems contrary to everything crypto claims to be about. "Just trust them, surely you'll get the money back"
Fair point to the author for finding the dynamic nature of Ethereum's progression not to their liking, but it's a real reach to portray it as some kind of class conflict parable.
it shows us that community and support for one another is the Layer 0 that these things are built on top of. code isnt law, people come first. if we stick with that it could work pretty well.
I also question whether miners are really providing the labour power, as you might expect the working class to do. They build the roads and keep the lights on but the means of production of value is (or ought to be) the services provided by those writing functionality that makes the network useful, i.e. the smart contract writers. Whether one thinks smart contracts on Ethereum have any value is another question but that was at least the vision.
A move to proof-of-stake does not remove the role of miners/validators. Validators will still earn a reward from validating blocks. So it's not as if this 'class' is being disenfranchised totally.
Finally the social class analogy entails disjointness of classes, this is certainly not the case for miners, many of whom are major token holders, and some of whom are involved in governance (of course by miners we are taking about the humans controlling the mining rigs not the computers themselves)
Agreed.
Marx's working class consists of those who do not own means of production, and are therefore compelled to sell their labour.
Miners do not lack means of production; they operate expensive mining machinery. That machinery continues to run, and earn money for the miner, even while the miner sits on the beach. Selling their labour really isn't a good model for what's going on. Miners are just ordinary capitalists, exploiting a market opportunity.
workers cycle: Commodity(labor) -> Money -> Commodity(food, housing bills)
Capitalists cycle: Money -> Commodity(means of production) -> Money(profit/surplus value)
At least that is the bit that kind of sticked to me and made me realized in the west you want to do the second cycle. Earn money by selling labor, live life as a cheap ass for a while use savings to become a asshole landlord.
Being an asshole is not a requirement for landlords, nor is it exclusive to them. Oppressed workers can be assholes too!
A hard fork is allowed to violate existing rules, and gives you more flexibility in what can be changed. And miners do not have the power to decide whether or not a hard fork will happen. A hard fork is determined by the users, who have to upgrade their software.
If the software updates automatically, then the power of hard forking lies with the developers, who could just push the new code out via an automatic update.
Kinda funny how this problem was solved before ETH even existed simply by removing the incentive for the hardware operator. No block rewards and no fees to collect aka no reason to fight over it. The only people who run the hardware without getting paid for it are the people who want to use it. They have aligned interest like a fast and cheap network and fast update cycles. And ofc no one who has to pay for the hardware and energy has any interest in PoW.
> A hard fork is determined by the users, who have to upgrade their software.
Who are 'the users' here? Light clients? Users of wallets? None of these have the power to adopt a fork, soft or hard. The collective action of the miners (or validators) defines which chains still retain liveness. For example in the hard fork between Ethereum Classic (ETC) and Ethereum (ETH) ETC was able to exist only because miners chose to to mine it. This in turn did give non-mining users the choice of how to distribute their demand and create extrinsic value for the ETC token. I wouldn't say this gives non-mining users any control over a hard fork since it happens after-the-fact.
> If the software updates automatically, then the power of hard forking lies with the developers
I don't know of a node distribution for Ethereum that works this way.
The core developers have power as in knowledge and power as in authority, the later being the traditional form of political power.
The ETC fork would have been successful at any non-zero support level from people with the ability to mine. And since any CPU can mine (just inefficiently), any fork can get a mining baseline. That may not give you a ton of security but it works.
People who run full nodes are the ones that decide hard forks.
> The ETC fork would have been successful at any non-zero support level from people with the ability to mine.
It would be economically irrational for people to send transactions to a fork with a single miner since that miner could unilaterally rewrite any transactions as they see fit. This is why I think miners have the ability to control forking.
A fork is generally considered successful if it carries economic value. That is decided by the amount of users transacting in the currency. Working exchanges are a requirement for this, but not enough (as has been experimentally demonstrated).
The power is split but the constant "fights" between the different parties (miners/users) is the reasons these fist-gen (PoW/PoS) blockchains can not be efficient. There is and forever will be a misaligned interest between the two parties which drives up prices and slows down progress.
Software's auto-update feature is completely irrelevant to consensus. It obviously does not define who has the power at all. To update is always voluntary. Software devs dont technically have any power they have influence.
This has been demonstrated empirically numerous times in crypto history, most notably the moment that >80% of the hashrate openly supported a hardfork that subsequently failed because it did not have user support.
Your node software decides what fork you run on. If someone can push an update to your software without your consent, they can choose to put you on a fork and you may not even realize it happened. This is why most full node software (including bitcoin and Ethereum) does not support automatic updates.
This is based on the assumption that miners would rather choose to abandon their business as a matter of principle than mine on the most profitable chain, and also somehow convince any future, unaffiliated prospective miners to also do the same. How could they ever achieve that? Miners don't control where the financial incentives are.
The power is split between miners and user. A majority from both parties are required to determine where the network goes the rest are somewhat forced to follow. If no such majority can be found the network can fork and both chains can be profitable for miners. I never said miners are in control, I disagreed with the parent who said users are in control - big difference.
But anyway these edge-cases are irrelevant. There is and will never be a situation where all miners and all user chose a different chain. Just the fact that some miners are users at the same time makes it impossible. The only thing important is that power is shared between the 2 groups and its a constant fight because of different interests. Even without miners when its fully PoS there will still be misaligned interests between the parties (users, hardware operators, stakes etc.)
Its an inherent flaw in the system because it relies on incentives which one party wants to maximize.
The arguments in the article would have carried more weight without the loaded language. Miners are more like banks in a fiat system rather than 'working class'. Pay cuts for middle-men means increase in efficiency of the system. Very evil indeed.